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Online Share Trading

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Advice on strategy for long term investing

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jo_soap
Contributor
Hi. I am new here and would love some advice on exit points for long term investing. I am busy investing in 4 top forty companies and 2 EFTs for long term purposes. I invest a set amount each month and look amongst my existing portfolio and add to my holding depending on which one looks good for an entry at the time I invest - which is at the end of the month. My question is how do you decide on exit points for long term investments or are there none? I have set up 15% trailing stop losses on all my portfolio. I look forward to getting some information.
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67 REPLIES 67
Not applicable
exit for your children's education or at time of your retirement. that stoploss seems bit tight. Take divident investing into consideration aswell.. My opinion.
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Not applicable
Well, In the words of the great investor, Buy and Hold (possibly to never sell). Over time, if you pick the right companies to suite your needs, gain enough stock to be considered a large share holder thus have influence in the company and eventually you could buy out the company etc. Other than that, min 10 years plus (remember diviends add huge amounts over time) and only sell when you really have to (and have zero other options left to raise cash) and NEVER EVER sell to help out family/siblings in a crises - they got themselves there and now want you to bail them out of their [email protected] and they are never really greatfull cause they come back next time(expreience). Stoploss to tight as mentioned. If you are young enough or it is for your kids you could not really be interested in the drop in prices other than to add more stock to the portfolio. IMO
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john_1
Super Contributor
JOE...buy satrix as there is a built in sell if a company falls out of the top 40...but for active investing..use the long term ave as your stoploss so if it closes below the 200 day..or below its trend line..otherwise stay with it.
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Blik
Super Contributor
I think for long term investing, your exit point should be when you need the cash, unless of course you need to get out of the share. I have split my portfolio into a long term account and a short term account. In the long term account I am going to try to keep the shares as long as possible 20-30 years, or unless I need to access capital for something urgent. Obviously depending on keeping tabs on the shares and how they are performing, while trying not to get sucked into a trading mindset for a long term approch. If I need to get out I will make that decision based upon what I think the share is doing and is going to do. Then I'll move that value into another long term share. I am also reinvesting my dividends into the long term account. To satisfy my short term mindset, I have created a second account with about 5% of the value of my long term account to play around with. This may go up or down and I expect I'll pay school fees over time.
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jo_soap
Contributor
Thanks All. John. Sorry but I am a bit of an ignoramus. What does the "200 day" mean?
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john_1
Super Contributor
Add a moving average of 200 days to your chart...that will give you its price relative to the last years trading... use a longer perriod if you wish... then sell if you have a weekly (fridays closing price) below that average..and add to you positions when it bounce off the average in the dirrection of trend...so you buying as close to the average as possible...
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jo_soap
Contributor
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jo_soap
Contributor
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jo_soap
Contributor
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Werner_1
Super Contributor
CPS, i agree with you. Buffett is famous for buy and hold, i believe in his approach, one key is not to overpay for any asset, so one will have to come up with a valuation method to try to identify what is considered overpaying and not... there are many ways one can do this. But my thoughts is that if one uses stoplosses and MA's to identify what is going on in your investment, it is actually not true long term investing as you would sell out over short term if the averages say so or the stop says so. i buy in dips/corrections/crashes and reap the rewards when the recovery starts. This has worked well over the past year or so and Buffett has proven that it always works, just need not overpay and reinvest dividends and hold for many many years... I think SBK is a good example of what happens over 20 years with dividends, they have a excellent record of about 20% CAGR over 20 years and add that to share price growth and it makes a huge difference, remember dividends can be used to acquire cheap shares in bad times once cash has accumilated, which when recovering or general conditions improve make more gains than buying in higher prices... i hope this makes sense.
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barry_1
Super Contributor
Have a look at the website.... www.valueinvestorsa.com which is run by people that look only at long term investing.It is better to set only alerts on really long term investments ,as trailing stop-losses can take you out if a share spikes and then within minutes returns to the orginal price ,then costing yourself a heap of trading money and if the price thengoes up at a disadvantage.By the way long term mean at least five years.
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Major
Regular Contributor
If you're buying the same stocks & ETF's each month, this adds a fair amount of expense to your portfolio. I would build up cash and then invest a min of R20,000 to avoid the charges becoming a significant part of the purchase price. Don't sell unless the investment proposition has changed. I keep very wide stoplosses to avoid being turfed out of a long term hold due to market volatility.
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Cherry
Regular Contributor
Jo Soap, if you dont know what a 200 day MA is then you shouldnt be doing this. Go on a few courses and paper trade in the meanwhile. Nobody has told you that the Market trades on average 200 days/year. I would also suggest you buy high, sell low and add to your position with the profits and not new money.
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Not applicable
Cherry, BUY HIGH SELL LOW??? but anyway you missed the point he is not trading but buying a long terms portfolio and adding to it every month. A course on investing is a good idea but not really a requirement. A good book ie effective investor - Franco Busetti at loot.co.za R283, will be a good reference to refer back to when you need to
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Werner_1
Super Contributor
I agree - once again... CPS - i like your comments, seems we have some common thoughts for investing (long term)... Cherry, i also almost fell of my chair when reading your comment about BUY HIGH and SELL LOW...
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Not applicable
Here is the question. If the intention is long term investing and trading fees is your biggest enemy, why not just buy into an ETF and let it run? You get all the benefits including dividends. Take 15% of your monthly amount and put it into a trading/"play" account and throw the rest into an ETF. Simple, easy, will definately grow over time, and most important, DECREASED RISK, unless it all falls flat like last year, but hopefully that was not the norm.
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Werner_1
Super Contributor
I guess some people can select single shares that will outperform the overall market, then one can benefit by selecting these specific shares more than owning the ETF which is a broad market/sector.
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Not applicable
True true, but if you go single share your incraese your risk with every purchase. Newbies always see the potential for growth and the bling assotiated with shares, but they ignore the risk factor. Everybody likes the bling, till the share drops in price and then they ask about the risk. ETF's have lower risk in my opinion. BUT, let's not be negative and put it simple. ETF's have a possible lower growth than normal shares, but they also have lower risk than normal shares. JUST BE CAREFULL OF THE BLING!!
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DR_1
Super Contributor
If you buy for long term, short term movements should not effect. Also having stop losses in long term investments is not the best, you typically will try not to loose money in the long term
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