If the investor begins to consider the sale of his investments, perhaps it is important to answer the questions that I indicate below, and in contact with the professional advisor to take the appropriate measures
It is important to think about the past when you started saving with a long-term investment plan.
At those times there were very specific objectives such as financial security, savings for the university studies of the sons or daughters, a pleasant retirement, etc.
Depending on the time in which this journey began, it will very likely have been observed and experienced the rises and falls of the stock market for multiple reasons, economic trends, bubbles that suddenly burst, the psychology of the markets, etc.
Perhaps this journey is short, a new experience and the investor does not know exactly how to interpret these movements, sometimes violent, sometimes incomprehensible, but which occur and have always occurred.
History tells and teaches us that markets move in cycles influenced by various factors, such as the economy itself, interest rates, or inflation.
If the current cycle does not favor the established type of investment, it is normal and humane to consider changes.
Before doing so, it is important to understand that these changes fit perfectly with the originally established long-term goals and objectives.
If the investor begins to consider the sale of his investments, perhaps it is important to answer the questions that I indicate below, and in contact with the professional advisor to take the appropriate measures.
Unfortunately, any decision will inherently carry the risk that every investment decision has.
It is part of this activity, investment is an art and risk is an unavoidable ingredient.
If the answer is yes, it may be a good decision to sell.
However, it is important to reflect on this point before making a decision in consultation with experts on the subject. Do I sell because I believe that other investments have performed better and I think I am missing an opportunity? Sometimes this can be a good reason to sell, however it is not unusual to see certain investments or sectors suffer temporary corrections.
Not all stocks and mutual funds give the same result every time.
It is good to review and analyze the reason why this product was initially purchased.
It is important to analyze and evaluate performance based on market conditions. If the investment continues to fit in with the long-term objectives initially established, it may not be advisable to sell.
Patience is a fundamental element in investments.
That patience has to give you the wisdom to wait in times of decline.
If the investment still fits with the pre-established plan, perhaps it is not necessary to sell and practice virtue, which sometimes makes you lose "patience" much more.
For the resident in the United States this element can be important. When it is sold at a profit there is a fiscal impact that awaits us at the end of the year.
It is important to consider this and consult with a tax expert before making a decision.
Investments made in the past may contain high-risk and low-risk products.
It is important to analyze when the impact on the level of risk established in the remaining portfolio is sold.
It is very important before selling to think about what to buy. Perhaps my interest is in a "very successful recently" product that is perhaps in the final part of the performance cycle.
It is also good to see and think that perhaps the substitution doubles an existing investment creating a situation of lack of diversification and therefore the risk of the portfolio.
Sometimes it is more advantageous to add more funds to an existing product than to buy something new, and it is important to consider this before making a decision.
These are a series of questions that I generally recommend.
It is important and necessary to sell at times to better diversify a portfolio, to collect profits and to rebalance a portfolio, constantly maintaining the principles of diversification and understanding and acceptance of market cycles and the real fact that nobody knows when these cycles they occur, for how long, and why.
I frequently hear and read explanations of these market movements.
Some experts give their reasons, others theirs; In the end, market conditions have always risen in the last century in uncontrollable movements, that is why it is so important, in my opinion, to be there, prepared for the storms of growth and with the mind set on the pre-established horizon.
