How long do you hold an investment position?

[novaman]

Just wondering what you think is a reasonable time frame to see if a particular position has been given a fair chance to play out before moving on. 1 yr? 3 yrs? just curious what your thoughts are

[bpp3]

'Til death do us part. Or need for consumption.

I'm counting on market efficiency to save me from having to come up with anything cleverer than that, on average.

[wildcat]

Personally, I think 3 years, on average, is a decent measuring stick for turnaround plays.

[clifp]

I've held some for a short as 2 months and other for as long as 20 years. I average probably 4 years, but I am going to start tracking my porfolio turnover just like the mutual funds do.

[rawg]

For me it can depends on the market, sector & the stock itself. Could be 1 day, 1 week or 2-3 years. What goes up usually comes back down.

[ERD50]

IMO, it's best to NOT look at the past. That is water under the bridge, rear-view mirror stuff. What is your current outlook for the future of the investment? That is what is important.

Example:

You buy $10,000 stock in company XYZ. It drops to $5,000 over three years. Two choices, sell or hold. Either way, you have a $5,000 balance.

A) Sell. Where do you put your money now? What will the returns be in that investment going forward?

B) Hold it. If the stock now starts moving up faster than your alternate investments, you are better off holding.

In either case, past performance may not be an indicator of future performance, so maybe it should not be an indicator to sell/hold.

I would hold/sell based on whether my outlook changed, not the past performance. If the reason I bought the stock in the first place seems to no longer be a good reason to hold it, sell. You can't change the past.

If you are talking about a mutual fund, and gauging the managers performance, I probably wouldn't. Index.

Taxes may affect the decision, but don't let the tax tail wag the dog.

-ERD50

[haha]

My oldest security has been in my portfolio for 21 years. Some years its annual payout is greater than what I paid for it. A great testament to buy and hold!

Ha

[kcowan]

I hold a value stock until it has 2 successive down quarters then usually sell it (unless there are serious extenuating circumstances). Many of our holdings are over five years old.

[Milton]

Quote:

Originally Posted by rawg Could be 1 day, 1 week or 2-3 years. What goes up usually comes back down.

Yikes!

[hayekcapitalist]

Obviously, holding period impacts tax rates, but IMO you must develop a thesis as rationale for a particular investment, the conviction to hold it until your expectations with respect to the investment are corrected or confirmed, and the discipline to sell, even if it means realizing a loss, when your thesis proves to be false. Also, because the universe of investments is fluid and dynamic, you might consider selling and putting the money to work elsewhere when a relatively superior risk-adjusted presents itself, taking into account the $$$'s lost to the friction of too frequent trading.