In stocks, I'm investing in a company through cost averaging (monthly). When do you sell?
Jan - May you invest 1,000 each month but through cost averaging you gained enough to cover a month's investment. Could I use that earnings to for next month instead of getting money out of my own pocket/ my planned total investment?
or you just hold and wait for a one time big time return after the 2 years? Or ideally, I should have had an exit price from the start?
Thanks
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M$3 Answers
Ideally you should have a general exit price from the start. Hopefully you bought the stock based on a thesis, which is your theory about why it's going to go up. If your thesis is based on an event (sales from Christmas time, for instance), then it makes sense to sell once the event has played out, regardless of whether or not your target price has been reached.
Also, if it's nearing the time you'd like to sell (based on your two year time line) and you get a spike due to anything from market conditions to blind luck, make sure to take advantage of it as you probably won't get a second chance.
Extensive Personal Experience.
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M$
1. determine your price target and amount of hold time(estimate)
2. write down all reasons why you bought the stock in the first place
3. check every week to make sure no company info has changed to make your target price or hold time change
4. if target price or hold time is reached, reevaluate
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