Funds & Equities - what's your buy/sell strategy?

brasso

Wow, what a helpful bunch.

Thank you for your measured responses. The fact that clearly experienced investors disagree with each other is part of the fascination of this enterprise.

I need to do some research on some of the methods and investments mentioned here that I didn't know about. Thanks very much for the moment, and no doubt there'll be a supplementary question or two!

Cheers

cloud_dog

EdInvestor wrote:

Stop losses don't work IME.When a stock is in falling knife/plunge mode, you will usually not be able to sell at your stop loss price, it will overshoot.

Most stocks that do this hit bottom and then bounce back, so even if you do decide to sell, it is often better to wait and get the higher bounceback price.With a stop loss you risk selling right at the bottom.:(

Afraid I have to disagree, the provider I use allows me to put in the stop (sell) price and a minimum sell price, therefore if during catastrophic sell-off (which is what we’re talking about here) the price is marked below my minimum sell price then the order will not get executed. The thing to consider is that you are more likely to be better off having a stop/loss and or a trailing stop/loss in place than if you don’t. Having them will allow you to minimise your losses and lock in any profits. buying at the bottom and or on a bounce is difficult and risky in its own right - 'catching a falling knife'.

cloud_dog

EdInvestor

... the provider I use allows me to put in the stop (sell) price and a minimum sell price, therefore if during catastrophic sell-off (which is what we’re talking about here) the price is marked below my minimum sell price then the order will not get executed.

Quite so.The stop loss doesn't work.You can't sell.

cloud_dog

EdInvestor wrote:

Quite so.The stop loss doesn't work.You can't sell.

Sorry Ed but, I think you're missing something, possibly the point. I agree that in freefall a stop/loss is unlikely to come into play but how often does that happen? Not often, stocks/funds usually drift lower or go lower in increments. A stop/loss would mitigate losses and it is therefore better to have one than not. The stop/loss is set at a level you think enough is enough; this could be 10% it could be 50% it your choice.

When investing you need to have a disciplined approach, you need to understand what you are investing in, what are the risks (potential gains / losses) and you need to have an idea of your exit point (high and low). Without this discipline you just become one of the heard and follow investments down (as well as up, which isn't an issue).

I am struggling to understand your opposition to stop/loss. In my mind they are a valuable saftey net. No, they are not a panacea to make money but they are a mechanism to retain money.

I think we will just have to agree to disagree on this one.

cloud_dog

al_yrpal

I'm a bit like carnet. I invest solely in Funds, and have roughly 50% in 'nanny' UK/European funds and the rest in 'hot' Funds. In the hot sector I chase fast growing sectors (60%-80% annual growth), moving from horse to horse as current funds are 'overtaken'. At present most Emerging Markets, and diminishing commodities are doing well, but this won't last, so I keep a weather eye on the sector table which tells me where I should be safely thinking of moving to next. From time to time I move cash from 'hots' to 'nannys' and less frequently from 'nannys' to savings accounts to keep my exposure to volatile sectors sensible.

I have a 'crash' strategy worked out, with paperwork ready for a fast move. I avoid reading financial publications and glean sentiment from normal quality newspapers which I find a better guide to markets.