Investment Strategy: The Exit Strategy That Nets Big Winners And Reduces Risk

Investment Strategy: The Exit Strategy That Nets Big Winners And Reduces Risk
By Marc Lichtenfeld

SmartStops comment: Pulitzer Prize winning philosopher Will Durant once observed, “The trouble with most people is that they think with their hopes or fears or wishes rather than with their minds.”
That insightful observation seems to be particularly true of most investors. This helpful investment article by a Senior Analyst at Mt. Vernon Research offers some suggestions on how to lock in bigger profits after your stock doubles. What do you do if it doesn’t double? Use SmartStops of course.

Excerpt: Learning From The DotCom Boom To DotCom Bust
At first, the stock began to slide. Then, when the dot com demon ravaged the sector, the stock plummeted. Eventually, it became worthless and the company closed its doors.
After that, I vowed that if one of my stocks ever doubles, I'll either sell half and get my original investment back, or put a stop at that 100% mark, ensuring that I won't lose money.
And let me tell you, this investment strategy works. Plain and simple. Not only does it help you grab big gains at the time, but it also helps you capture even larger gains. That's because when you're not worried about losing money, you're more inclined to let your winners run. Fear is no longer a controlling emotion.
And that's the key to having a successful investment strategy: Limiting your losses and letting your winners run. Sounds simple, I know. But you'd be surprised how many people let fear and greed control their decision-making process.

Link to article: