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When do you decide to cut your losses and sell?
gtstang
Posts: 1,692 ✭✭✭✭✭
Wishful thinking is great but sometimes just cutting your losses and putting those funds elsewhere can be a better economical decision.
What are some other thoughts and opinions on this market?
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As soon as possible when it becomes apparent, I miscalculated.
My purchases were made with funds that don't require me to sell until I'm happy with the selling price. I have other funds elsewhere, many of which hedge my metals.
Keep an open mind, or get financially repressed -Zoltan Pozsar
pms like stocks amzn & nflx always come back
time, time is always on my side
To be honest, I have no intention of selling. I began stacking to diversify my portfolio. Now, I’m holding metals to diversify the assets I leave to my kids. It will be all profit for them regardless of spot prices.
Like derryB, I have enough money put away to prevent me from having to sell my metals in case of emergencies.
MY GOLD TYPE SET https://pcgs.com/setregistry/type-sets/complete-type-sets/gold-type-set-12-piece-circulation-strikes-1839-1933/publishedset/321940
Recurring theme here, metals all locked up and kinda forgotten about. If we wanted to buy or invest in something else, most likely a different asset class that's been performing better would get sold instead of PMs.
Easy answer when metals are less than 10% of net worth and doing one of their multi-year slumps. Might even buy more instead of "cutting losses" but if the % of assets was higher, or the pm prices were higher and met profit targets, or they seemed overbought (like in 2011) and ahead of themselves, or one just "needed" the money back out, you just do what you have to and take what you can get.
Liberty: Parent of Science & Industry
I'm a bottom feeder
Like any market, the PM market cycles up and down...Strangely, many sell when prices go down and buy on the up swing....Logically, it should be the reverse - however, logic does not enter into it for many people. Cheers, RickO
If you have a reason to sell to cut losses, then you need a reason why the upside will be better than the downside.
If you are looking at a downside, the exit point will present itself.
The hard part is the discipline to follow through.
If I had a personal SHTF event and I was down to selling silver, I would have to decide then if I needed the money bad enough sell or not. My buy price wouldn’t determine much, just what it could produce at that time. It would have to be an event pretty severe though for me to dip into and sell at a loss, otherwise, it can sit and wait until the price rises enough to make a sale lucrative. Even then, it can sit until I need it for an emergency.
I don’t really buy metals to flip the splits in spot prices. I get that some do, dealers that are in the action every day and I’m not.
even in a shtf scenario, one should have multiple plans in place to avoid panic sales of pms or collectibles, in random order
1. adequate insurance
2. liquid emergency funds equal to x # of months
3. sufficient equity in residence/income property to tap
4. have xcellent credit to borrow from banks/ccs
5. borrow from one’s ira, 401k accounts, life insurance policy
I have decided to cut my losses, in the sense that I have sold off a large number of items that I accumulated in serendipity over the years, some on impulsive appeal, some on a hunch (often misguided, sometimes not) of increasing demand for it down the line.
The biggest factor is that I likely don't have a quarter century to let things shake out like I used to (I'm 73 next month). I decided instead to get my narrow voluptuous "box of 20" to revel in, with the proceeds. I figure they'll be a lot easier for my heirs to deal with down the line, as well.
Here's a warning parable for coin collectors...
"Cutting your losses" tells me that a portfolio isn't being managed. It tells me that there is no real plan to accumulate wealth, but instead the motive is to "get rich quick". This situation indicates a lack of planning, in my opinion.
A loss isn't a loss until the asset is sold off. Likewise, a gain isn't a gain until it is realized when you sell the asset. Because of how the monetary system is set up for constant growth, and because of demographics, most assets "gain" in nominal value over time. In most cases, you can do pretty well in most any asset over time - if you take a longterm approach, hold contingency cash, and aren't "shaken out" of your position.
You could benefit from longterm holding in precious metals, bonds, stocks, real estate, classic cars, even desirable coins or gemstones (as long as there are "believers" and as long as the asset isn't targeted by a socialist government for confiscation or "windfall" taxation.) The rules, or lack thereof - are always subject to change - so situational awareness is a good thing to cultivate.
If you've been accumulating for a relatively long time, you can manage your tax liability by selling stuff that has significant gains to offset any losses. Myself - I've been doing the much the same as dpoole - selling items that I accumulated in serendipity over the years.
However, in the meantime - since I am a "true believer" of saving via precious metals (and getting away from the moral and other hazards rampant in the banking system and rigged stock market) - I'm still buying, only in larger chunks consistent with current earnings in order to consolidate my holdings - for easier management in retirement, or by my heirs as the case may be.
I used to think that you could analyze markets and make good choices based on data. I no longer think that. The data has been skewed and politicized. Like I said, the rules, or lack thereof - are always subject to change - and your good choices can turn into dumb moves, practically overnight. Historically, this has happened in other countries and we do live in a global economic environment, especially when it comes to finance and money.
Thus, the idea is to manage the risks. The definition of risk in finance is directly linked to statistical variance. Spreading the risk (variance) over time is almost the same as spreading the risks over different classes of assets. There is some justification for spreading risk between the different metals as well. I will admit to buying some real estate, but no stocks - for quite some time. That's not to say stocks won't serve the same function, because they will - if you manage your risks.
A spreadsheet is your friend, not only for tracking tax implications when choosing what to sell, but also for doing an occasional "sensitivity analysis" based on different "what if" scenarios. You never get a definitive prediction, but you do get a feel for the interconnectedness of what you own.
Not every purchase is a winner, but "cutting your losses" isn't the same as selling an asset at a loss as part of an overall plan. In my opinion, you should never stretch so far for a speculative gain that you feel pressured to sell if it doesn't work out.
I knew it would happen.
When you no longer think your reason for buying makes any sense.
There are many points of view and they can all be valid for that person, at that time, considering the rest of one's portfolio, and of course, need.
You can change the way you think about it and what you would do if it was a stock or a mutual fund or housing investment.
Then there's how you look at it after you sell. I gradually sold off all my junk stuff at various loss levels on the way down and paid bills. I felt bad each time - until it went down even further. ;-)
I’ve always said that if your stacking and holding on to PM’s with a potential of needing to sell them for financial emergencies then you shouldn’t be stacking in the first place.
That's rule #12
No one follows it.
When it goes lower I don't contemplate selling. My dumb arse just buys more. Stack on. lol
The whole worlds off its rocker, buy Gold™.
Capitulation talking?
Knowledge is the enemy of fear
I learn so much here , it's mind boggling why i stay away for the length of time that i do.
When it is time to cut your losses.....................it's time to buy
JMHO
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
I'll be looking to sell into the eventual stock market crash.
When I need to pay for food, shelter, or clothing.
When JP Morgan decides to collect their profits.
Keep an open mind, or get financially repressed -Zoltan Pozsar
When the greed of digging a pool now exceeds the hope someone wants to buy these stupid shiny rocks for significantly more someday..
Liberty: Parent of Science & Industry
If your underwater with your metals, now is no better time time buy. I stack long term. I may Evan pass away before it goes way back up... but it will.
Right not, this very instant. I sold everything back in 09' or so. Will never go back to metals. If SHTF, greenbacks can be used in every store and with every person on this planet. Metals? Not so much.
The kids' problem, not mine. It took a lot of time to stack it, let them unstack it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
You haven't been outside of the U.S. much. Gold is the universal currency. It isn't boycotted, it doesn't burn, and it's been around longer than 1862.
Currency works at the moment.
Is it a store of wealth? Over what time period? Does it have any counter party risks?
What a great problem to have.
MY GOLD TYPE SET https://pcgs.com/setregistry/type-sets/complete-type-sets/gold-type-set-12-piece-circulation-strikes-1839-1933/publishedset/321940
Bought more this past week. I'm a sick individual, at these levels.
Sell? What is this of which you speak?
What'd you buy?
Never sell, never lose
Menomonee Falls Wisconsin USA
http://www.pcgs.com/SetRegistr...dset.aspx?s=68269&ac=1">Musky 1861 Mint Set
For me, gold is a small hedge to my other investments. It’s part of a diversified strategy so I don’t sweat the ups and downs much.
8 Perth Mint gold bars
1 Gold Buffalo
7 tenth Oz AGEs
Sold a few ounces of silver, though. Not at a loss. More at a break even point.
That was last week. Who knows what will walk in this week ?