Investments – sell or hold until the last minute?
Even with an uptrend, the price does not move constantly upward; its rises are followed by a correction, after which growth resumes again.
At the same time, no one guarantees that a trend reversal and instead of making money, you will receive losses.
For example, a bitcoin purchased at $40,000 could have been sold at $60,000, but the opportunity was lost and the price fell below the purchase price.
Therefore, many investors ask the question - Is it better to sell as soon as a certain profit is made or is it better to hold the position until the last minute?
On the one hand, short-term trading can be more profitable. Investors who buy and sell assets over a short period of time earn higher returns than those who hold trades for a long time.
This is because asset prices are more volatile , giving traders more opportunities to make profits.
On the other hand, long-term investing seems more reliable. Investors who hold trades for a long time are less exposed to the risks of short-term price fluctuations. This is because asset prices tend to rise over the long term.
So, what is more profitable - selling or holding the deal for a long time? The answer to this question depends on several factors, including:
Your investment horizon. If you are planning to invest for a short time, then short-term trading is likely to generate more profits. If you are planning long-term investments, then long-term investing will be more reliable and will not require additional time investment.
Your risk profile. If you are willing to take risks, then short-term trading may be more attractive to you. If you prefer a conservative approach, then it is better to choose long-term investing.
Trading asset. Holding a position for a long time is appropriate when the purchased asset brings additional profit. For example, these could be dividends on securities; here, in addition to price growth, there is also a stable income from accrued dividends.
Method of trading. Trading through a broker and trading platform is suitable for both short-term trading and long-term investments, but the actual purchase of assets is more suitable for long-term transactions.
This is due to the large spread when transactions with cash currency or precious metals; due to the high commission of banks, it will not be profitable to buy and sell quickly.
Ultimately, the decision whether to sell or hold a trade for the long term is an individual one. Each investor must decide for himself which approach suits him best.
Comparison of earnings using personal example
If we compare the amount of profit from short-term transactions or long-term investments in gold, the following picture has been observed for more than a year.
The price of precious metal moves in the range from 1700 to 2000 dollars per troy ounce :
During the year, I have already entered into transactions to buy this asset three times when the price of gold fell below $1,850, and closed when approaching $2,000 or when making a profit of $3,000.
That is, in three trades I managed to earn about $9,000; if I had opened only one trade and held it all this time, I would not have earned anything. I would simply have an open trade to buy the XAUUSD pair .
And to earn $9,000, I would have to wait for the price to rise to $2,400 per troy ounce. A different picture is possible for other assets, but a similar situation is currently emerging for gold.
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