How to know when to sell?

Seifer

I realise this is a question that may not have one right answer or any right answers but I figured I'd ask anyway.

I bought some gold a couple of weeks back and it's now worth about 7% more than it was then.
My original goal with investing was just to beat the crappy interest rates being offered by the banks which I have now done. So should I get out?
Should I have set a specific target to get out at from the outset? e.g. 10% return
Or should I have made it a time based thing? e.g. leave it there for a year
Or should I wait until I see signs that the gold bubble maybe about to burst? I think this option is probably the most dangerous since in reality I don't know what those signs are.

This isn't specifically related to gold so more general answers are welcomed.

digme

When do you need to use this money?

Seifer

Not for the foreseeable future.

digme

Be specific.
Have you any goals in mind?
You seem to just want to hedge against all this printing, i'd say you're grand for another few years/
But if you feel the mania phase has set in and everyone is talking about gold,don't try guess the top and get out into another asset which is under priced.
What time frame are you looking at if you need the money?

Seifer

digme wrote: »

Be specific.
Have you any goals in mind?
You seem to just want to hedge against all this printing, i'd say you're grand for another few years/
But if you feel the mania phase has set in and everyone is talking about gold,don't try guess the top and get out into another asset which is under priced.
What time frame are you looking at if you need the money?

My only goal is to maximise my gain and as stated above to earn more than leaving it in a savings account.

The don't try to guess the top bit is what I'm interested in. Would I not have to estimate the top to decide whether it is more prudent to get out now? Given I could potentially make more money elsewhere I would have to have something to compare against.

I'm not sure what you mean by the last question. I don't see myself needing the money within the next year and probably beyond.
If you mean how quickly would I need access if I decided I did need it; maybe a month.

SBWife

Look at potential risk v. reward. At my first job we kept upside downside potential lists for each asset we held. When the downside started to seriously outweigh the upside we exited the position. Provided discipline and while you rarely if ever saw the top you were never surprised by a serious reversal either.

irishh_bob

Seifer wrote: »

I realise this is a question that may not have one right answer or any right answers but I figured I'd ask anyway.

I bought some gold a couple of weeks back and it's now worth about 7% more than it was then.
My original goal with investing was just to beat the crappy interest rates being offered by the banks which I have now done. So should I get out?
Should I have set a specific target to get out at from the outset? e.g. 10% return
Or should I have made it a time based thing? e.g. leave it there for a year
Or should I wait until I see signs that the gold bubble maybe about to burst? I think this option is probably the most dangerous since in reality I don't know what those signs are.

This isn't specifically related to gold so more general answers are welcomed.

hold onto it , while thier will undoubtabley be a sell off in the coming weeks , it will still level off well above where you bought , which i assume was under 1100

foxyboxer

create a weekly chart for gold. set it up with a 40 week moving average. When that line starts to turn down (think the crest of a roller coaster) SELL. :cool:

Seifer

SBWife wrote: »

Look at potential risk v. reward. At my first job we kept upside downside potential lists for each asset we held. When the downside started to seriously outweigh the upside we exited the position. Provided discipline and while you rarely if ever saw the top you were never surprised by a serious reversal either.

Would that mean you'd sell as soon as a company provided negative earnings? Or a market for a given product/service was expected to shrink?
How did you weight your positives and negatives? Given the above scenario but with a growing market instead, how would you decide which was more relevant?

irishh_bob wrote: »

hold onto it , while thier will undoubtabley be a sell off in the coming weeks , it will still level off well above where you bought , which i assume was under 1100

If you believe that to be true would it not be better to sell now and rebuy when it settles down again?

yellowlabrador

It's going to cost you to sell it. What form is it in? If it's a coin you might find it's lost a premium for not being in mint condition. get a today value for it, you might be disappointed. Set a minimum price that would make you consider selling if you have no other investment options. I bought gold coins before the last 'goldrush' in 1980. I bought the coins from a bank and they came in a sealed plastic container. I never touched them, yet when I took them back to the bank to sell them, they lost some value because the bank claimed they weren't in mint condition despite me having paid for that. They always outsmart you.

Seifer

yellowlabrador wrote: »

It's going to cost you to sell it. What form is it in? If it's a coin you might find it's lost a premium for not being in mint condition. get a today value for it, you might be disappointed. Set a minimum price that would make you consider selling if you have no other investment options. I bought gold coins before the last 'goldrush' in 1980. I bought the coins from a bank and they came in a sealed plastic container. I never touched them, yet when I took them back to the bank to sell them, they lost some value because the bank claimed they weren't in mint condition despite me having paid for that. They always outsmart you.

It's in bullionvault.com so the commission would be 0.8% if I were to sell.

irishh_bob

Seifer wrote: »

Would that mean you'd sell as soon as a company provided negative earnings? Or a market for a given product/service was expected to shrink?
How did you weight your positives and negatives? Given the above scenario but with a growing market instead, how would you decide which was more relevant?



If you believe that to be true would it not be better to sell now and rebuy when it settles down again?

if you had bought in at 700 an ounce , yes , you bought in at close to 1100 , if you sell now , you pay 1% commision and if you decide to buy back in again in a few weeks , you pay 2% ( minimum ) commision to get back in