Many long-term investors are sitting on handsome winnings from the massive bull market of the last several years. Nearly everyone was riding high on bullish enthusiasm, and nothing seemed to go wrong. Investors were successfully buying dips as the stock market pushed to record high after record high. It was an actual golden age from the stock market to cryptocurrencies, as even beginners basked in sometimes steady and sometimes obscene profits. #-ad_banner-#Then the impossible happened — stocks started falling fast as investors scrambled to lock in profits by liquidating their holdings. While taking profits is always a smart move, it’s… Read More
Many long-term investors are sitting on handsome winnings from the massive bull market of the last several years. Nearly everyone was riding high on bullish enthusiasm, and nothing seemed to go wrong. Investors were successfully buying dips as the stock market pushed to record high after record high. It was an actual golden age from the stock market to cryptocurrencies, as even beginners basked in sometimes steady and sometimes obscene profits. #-ad_banner-#Then the impossible happened — stocks started falling fast as investors scrambled to lock in profits by liquidating their holdings. While taking profits is always a smart move, it’s hard to not think about what would have happened had you held your shares. The prevailing wisdom is that you can always buy back your stocks after taking profits. Of course, this makes sense, but it is tremendously challenging to execute. My hat is off to you should you not struggle to buy back at a lower price after selling. On the other hand, professional stock traders and investment firms often hedge their long positions rather than selling to protect their gains. A well-managed hedge can protect your profits while allowing for upside potential in the stock. Here are three… Read More