Investments – sell or hold until the last?
Even with an uptrend, the price does not move upwards continuously; its rises are followed by corrections, after which growth resumes.
However, no one guarantees that the trend will reverse and that instead of making a profit, you will end up with losses.
For example, a Bitcoin purchased for $40,000 could have been sold for $60,000, but the opportunity was lost and the price fell below the purchase price.
Therefore, many investors ask themselves: Is it better to sell as soon as a certain profit is made or is it better to hold the position until the very end?
On the one hand, short-term trading can be more profitable. Investors who buy and sell assets within a short period of time earn higher returns than those who hold trades for the long term.
This is because asset prices are more volatile , giving traders more opportunities to make a profit.
On the other hand, long-term investing seems more reliable. Investors who hold positions 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's more profitable—selling or holding on to a deal for the long term? The answer to this question depends on several factors, including:
Your investment horizon. If you plan to invest short-term, short-term trading will likely yield higher returns. If you plan to invest long-term, long-term investing will be more reliable and won't require additional time investment.
Your risk profile. If you're risk-averse, short-term trading may be more appealing. If you prefer a conservative approach, long-term investing is better.
Trading asset. Holding a position for a long time is appropriate when the purchased asset generates additional profit. For example, this could be dividends on securities, which, in addition to price growth, also provide a stable income from accrued dividends.
Trading method. Trading through a broker and a trading platform is suitable for both short-term trading and long-term investing, while actual asset purchases are more suitable for long-term transactions.
The reason for this is the large spread when trading in cash currency or precious metals; high bank commissions make it unprofitable to buy and sell quickly.
Ultimately, the decision to sell or hold a deal is an individual one. Each investor must decide for themselves which approach is best for them.
Comparison of earnings based on personal experience
If we compare the size of profits from short-term transactions or long-term investments in gold, the following picture has been observed for more than a year.
The price of the precious metal moves in the range from 1,700 to 2,000 dollars per troy ounce :
Over the course of a year, I have already entered into three buy trades on this asset when the price of gold fell below $1,850, and closed them when it approached the $2,000 mark or when I made a profit of $3,000.
So, in three trades, I managed to earn about $9,000. If I had opened just one trade and held it the entire time, I wouldn't have made any money. I would have simply had an open buy trade on the XAUUSD pair .
To earn $9,000, I'd have to wait for the price to rise to $2,400 per troy ounce. Other assets might see a different picture, but gold is currently in a similar situation.
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