There are many examples that you should hold on some stocks like APPL... Interestingly there are many examples to do the opposite like AIG, Lehman Brothers...
My point is you cannot execute any strategy based on exceptions. You really need to design a good test plan and execute it before you draw a conclude. The test plan depends on a historical database that takes survival bias (the bankrupt, the merged, the spun off...) into consideration. Otherwise, your test is not correct and make you lose money if you execute it.
I do not have such a test plan as I cannot find a good historical database. Why I trade is: 1. To improve my portfolio for better (supposedly to be) potential of total return and 2. Market Timing (not a sure thing).
I do have some sold stocks making another 100% or losing another 50% if I have hold them for n more months. I track the performance of sold stocks and I conclude they break even factoring in opportunity to buy another stock.
Never fall in love with a stock. Never be afraid to buy back a sold stock if there is potential for good return.
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There are exceptions.
When your stock appreciates many, many times and you're close to your life expectant age, hold it and the cost basis will step up when you die.
Rotation of portfolio for diversification. Your ma told you not to put all eggs in one basket.
Sell when you're sure we're heading to a big plunge. You can always buy back the sold stock at supposedly better price.
You need money...
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(c) TonyP4 2012. Written in 4/25/12. Last updated in 4/25/12.
Disclaimer:
Do not gamble your money you cannot afford to lose. Past performance is a guideline and does not guarantee future performance.
All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.
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