Beginner exit strategy on stocks?

EasyToAssemble01

One thing I didn’t factor in when I started investing was: when should I sell?

I overwhelmingly invest in long-term ETFs, but have about 15% in individual stocks.

I’ve learned that the general rule is to sell at +15% - 20% from buy-price. But, is it better to sell the whole lot, or just part of the stock?

I’m very new to fundamentals, which is something I need to learn how to read. I’m currently just picking value stocks, which appear promising, and putting in conservative amounts. Currently Samsung, Greggs, B+M, and Burberry. 

What are your preferred selling strategies?

Middle_of_the_Road

EasyToAssemble01 said:

One thing I didn’t factor in when I started investing was: when should I sell?

I’ve learned that the general rule is to sell at +15% - 20% from buy-price. But, is it better to sell the whole lot, or just part of the stock?

I’m very new to fundamentals, which is something I need to learn how to read. I’m currently just picking value stocks, which appear promising, and putting in conservative amounts. Currently Samsung, Greggs, B+M, and Burberry. 

What are your preferred selling strategies?

Sounds like you're buying stocks in individual companies, hoping to make gains in the short term.
The usual advice on hear is that this is a very risky proposition, more like gambling.
Successful investing usually involves holding multi-asset funds or trackers for minimum 5 years but ideally longer to be able to recover from market a downturn.

If you bought Tesla recently, how would you feel loosing half your stake?

EasyToAssemble01

Middle_of_the_Road 

Sounds like you're buying stocks in individual companies, hoping to make gains in the short term.
The usual advice on hear is that this is a very risky proposition, more like gambling.
Successful investing usually involves holding multi-asset funds or trackers for minimum 5 years but ideally longer to be able to recover from market a downturn.

If you bought Tesla recently, how would you feel loosing half your stake?

Sorry - I should have added that the vast majority of my portfolio is ETFs (S+P, World, and FTSE100) + a popular Dividend Pie which I intend to hold long term. The stocks are an add-on to that.

kempiejon

Middle_of_the_Road said:

EasyToAssemble01 said:

One thing I didn’t factor in when I started investing was: when should I sell?

I’ve learned that the general rule is to sell at +15% - 20% from buy-price. But, is it better to sell the whole lot, or just part of the stock?

I’m very new to fundamentals, which is something I need to learn how to read. I’m currently just picking value stocks, which appear promising, and putting in conservative amounts. Currently Samsung, Greggs, B+M, and Burberry. 

What are your preferred selling strategies?

Sounds like you're buying stocks in individual companies, hoping to make gains in the short term.
The usual advice on hear is that this is a very risky proposition, more like gambling.
Successful investing usually involves holding multi-asset funds or trackers for minimum 5 years but ideally longer to be able to recover from market a downturn.

If you bought Tesla recently, how would you feel loosing half your stake?

Nothing wrong with buying individual companies, it's more risky than say premium bonds which is gambling, a monthly prize draw. Multi asset funds and trackers hold individual companies.
Value investing isn't easy. I hated selling, found it the downside to the strategy. I don't know about those general rules, seems flawed, locks in a loss, limits a profit. If a share I thought was undervalued has fallen 20% since my first purchase and the reasoning was good why sell. I had many value shares that rose by far more than 20%. I liked value investing, although profitable was stressful and hard work. I picked shares, I thought I had established what that value might be so either that will out or it will not. When value outs - share price appreciation/takeover etc if you have a mind to redeploy that money sell. I generally sold when I thought value had outed and I had somewhere better to invest. It can take ages, in fact I still hold shares I saw as undervalued 10+ years ago worth many times my buy.
Sometimes you pick a dog, sell if the value evaporates or you see a better prospect.

If you are new to fundamentals and only using conservative amounts of money then it's a good learning process and OK if it costs a few quid. Taught me loads, I poured over company accounts, created my own spreadsheets, sorted out debt and goodwill and looked at the market, regulation and competition.

To learn you need to know why your examples of Burberry, B&M, Greggs and Samsung are undervalued by the broader market, teams finance professionals, analysts and a hoard of private investors. And what you think is fair value. To have made a purchase those companies must have been below fair value.

IanManc

EasyToAssemble01 said:

One thing I didn’t factor in when I started investing was: when should I sell?

I’ve learned that the general rule is to sell at +15% - 20% from buy-price. But, is it better to sell the whole lot, or just part of the stock?

I’m very new to fundamentals, which is something I need to learn how to read. I’m currently just picking value stocks, which appear promising, and putting in conservative amounts. Currently Samsung, Greggs, B+M, and Burberry. 

What are your preferred selling strategies?

I've been investing for over 30 years and I've never heard that "general rule" before.

You also need to consider capital gains tax and your HMRC reporting obligations.

Bostonerimus1

Before I was retired I would buy or sell whenever my asset allocation deviated by more than +/-5% from 60% stocks and 40% bonds; so I was just rebalancing across very broad index funds. I discovered early on that beyond that I had no idea and so I'm a long term investor. I've held some of the same funds for over 30 years and never plan to sell. OP you are thinking short term and that is when you can get into trouble. I don't have any advice that specifically addresses your question, but I would advise you to change the way you approach investing and bring your eyes up from looking at your feet to looking at the horizon.

EasyToAssemble01

Bostonerimus1 said:

Before I was retired I would buy or sell whenever my asset allocation deviated by more than +/-5% from 60% stocks and 40% bonds; so I was just rebalancing across very broad index funds. I discovered early on that beyond that I had no idea and so I'm a long term investor. I've held some of the same funds for over 30 years and never plan to sell. OP you are thinking short term and that is when you can get into trouble. I don't have any advice that specifically addresses your question, but I would advise you to change the way you approach investing and bring your eyes up from looking at your feet to looking at the horizon.

I’m mainly invested long-term in ETFs (85% of my portfolio I’d say), but was interested in value stocks, as a short-term opportunity.

eskbanker

EasyToAssemble01 said:

I’m mainly invested long-term in ETFs (85% of my portfolio I’d say), but was interested in value stocks, as a short-term opportunity.

But any investment should be made with reasonably specific objectives in mind, so how do you quantify "a short-term opportunity", in terms that are meaningful to you when determining whether and when you've achieved what you wanted to?

kempiejon

EasyToAssemble01 said:
I’m mainly invested long-term in ETFs (85% of my portfolio I’d say), but was interested in value stocks, as a short-term opportunity.

I didn't really see value as short term but it was interesting, well I enjoyed the learning, made a buck but decided I didn't have the mental fortitude for it long term. I couldn't really shake the feeling I'd got lucky and that a few bad picks could really set me back. A few times it was only months for value to out or me to give up on the prospect. Generally holding time a year or two. I only every found a handful of good shares at any given point in time so waiting for value to out and finding a new worthy prospect I wouldn't say is a quick turnaround. Buying an index is easy, the price is always fair, no research needed.
Still my idea of value might be different to yours and of course a couple of years is short term compared to many investors holdings. I said I don't bother with value so much these days but I did pick up Natwest bank last year and that value looks to have has outed but I don't yet have a new pick to cycle into, in the mean time I get 4.5% yield in dividends.

Eyeful

1. Have never come across your general rule is to sell at +15% - 20% from buy-price.. Where did you find it?
2. How long have you been investing in single shares (which is very risky)?.
3. Why are you investing in single shares anyway?
4. You are supposed to learn share fundamentals, before investing not after.
5. How many of the share fundamentals do you check & what are the ones you use.
6. Did you run a dummy portfolio of shares to see how good your selection process was before jumping in for real?  
7. How many single shares do you run at any one time?
8. Stock brokers & platforms love customers who churn their shares often, as they make easy money from them.
9. If the share you bought keeps going up and the shares fundamentals have not got worse.
Sell if (a) you need the money or (b) You have found a better share.
10. Have you heard the saying?       "Run your winners & sell your losers"

Hoenir

EasyToAssemble01 said:

I’m very new to fundamentals, which is something I need to learn how to read. I’m currently just picking value stocks, which appear promising, and putting in conservative amounts. Currently Samsung, Greggs, B+M, and Burberry. 

For a good read on individual stock selection I can highly recommend 

The Smart Money Method: How to pick stocks like a hedge fund pro by Stephen Clapham.