Starting off trading on Robinhood a while back I bought some stocks in a few companies I thought were undervalued and were due to rebound. This was before I started educating myself and way before I understood that I needed a strategy.
Full disclosure; I bought shares of General Electric (GE), JC Penny (JCP), and Advanced Micro Devices (AMD). In my mind GE was a titan of industry and there was no way it is going away. Well it is no longer part of the Dow Jones Industrial Average and the basis of this article. Next is JCP. With the imminent death of Sears my mindset was, maybe still is, that JCP will start picking up Sears department store customers. This holiday shopping season will make or break the position as I intend to sell it before December 31st. If I make money great, if not it’s a write of for this years tax return. I don’t want to be dismissive about the write off but the company no longer falls under my strategy and it needs to go.
To date AMD has been my best buy and sell. I picked it up around $13 dollars a share and sold at $18. Since then it has ridden up to a high of $32 a share. This has caused me some sellers remorse. More importantly I had an opportunity to sell my position of GE a couple of weeks ago and break even on an investment that was no longer part of my value investing strategy. I held off remembering how much AMD rose after I sold it. GE didn’t keep going up though, it has gone back down. The psychology of buying and selling is interesting. I knew I had a chance to get out of an investment at no loss but got greedy because of one past occurrence.
This boils down to one investing mistake: Set guidelines on when to sell your position and follow through with it.