Investing - Holding long term

[slow06]

When you buy intending to hold long term, when does it make sense to cash in way before you need to?

Bought a little bit of IR back around $30 or so. Don't need to sell, but it is at an all time high of ~ $55 and I am thinking of getting out, and hoping it drops down giving me a chance to buy back in later, or looking into something else.

I can't think of any reason not to sell. I don't need to, but I don't want to squander the chance to make 80% just to hold on to it.

I'm leaning towards selling it, is there any good reason to hold in a situation like this, thinking long term?

(I am getting $0.16 cents a share quarterly dividend, if that makes a difference)

[Ratt]

Need to know # of shares.

[slow06]

Need to know # of shares.

What difference would that make? (honest question) If I had 2000 would you say one way, but 50 you would say another?

It's that principle I am trying to understand, so if you could explain why it would make a difference that would help more than specific information for my situation.

Thanks.

(Wondering if the # of shares would matter more in relation to the dividend?)

[talisman]

Define long term.

[juiceweezl]

What difference would that make? (honest question) If I had 2000 would you say one way, but 50 you would say another?

It's that principle I am trying to understand, so if you could explain why it would make a difference that would help more than specific information for my situation.

Thanks.

(Wondering if the # of shares would matter more in relation to the dividend?)

To me, and maybe what he's getting at, is selling a partial amount to recover the original investment, a little bit of profit, and still keep some in IR if you think it will continue to go up. You can always do that (sell to recover the buy in plus a little more) and then leave quite a bit. Watch closely and pull the rest if it starts to head south. That's what I try to do when I buy in on something that goes up fairly quickly. I'm no market genius though...

[03mustangdude]

if you need the money sell or if your not comfortable with the risk sell otherwise hold.

[92redragtop]

You're getting a 2% yield now so you can decide if you can do better else where and move your capital accordingly (while locking in your cap gains on this stock). If you're happy with the yield then it may be a good idea to do as juiceweezl said and recover some/all of your initial investment or take the profit off the table and keep the rest of the stock.

What is your outlook/expectation for the company/stock? Maybe you're thinking it's over-valued so you want to move your capital to something that's been beaten up and has more upside?

Do you expect it to keep going up? Or to pull back? You can always cash out and short it if you expect the latter to make money going up and going back down.

[slow99]

You have to consider the delta from a tax perspective as well - 15% long term vs your marginal rate.

[slow06]

Define long term.

I guess meaning im not a day trader 20-30 years? I bought it over a year ago and am only considering selling because of how high it got. I was never looking to make a "quick buck".

To me, and maybe what he's getting at, is selling a partial amount to recover the original investment, a little bit of profit, and still keep some in IR if you think it will continue to go up. You can always do that (sell to recover the buy in plus a little more) and then leave quite a bit. Watch closely and pull the rest if it starts to head south. That's what I try to do when I buy in on something that goes up fairly quickly. I'm no market genius though...

Well I wouldn't call this a volatile stock. I don't expect anything quick, but If I had to guess I expect a drop in the next several months. but then again I'm no slow99

You're getting a 2% yield now so you can decide if you can do better else where and move your capital accordingly (while locking in your cap gains on this stock). If you're happy with the yield then it may be a good idea to do as juiceweezl said and recover some/all of your initial investment or take the profit off the table and keep the rest of the stock.

What is your outlook/expectation for the company/stock? Maybe you're thinking it's over-valued so you want to move your capital to something that's been beaten up and has more upside?

Do you expect it to keep going up? Or to pull back? You can always cash out and short it if you expect the latter to make money going up and going back down.

I wouldn't say I am educated enough to accurately judge it's value, but i am expecting a little pull back. Couldn't say how much though.

You have to consider the delta from a tax perspective as well - 15% long term vs your marginal rate.

I have already held it over 1 year so I think I am out of hot water there, right?

I may sell enough to get my original investment out and see where it goes from there. I would love to cash out and then get back in if it were to drop. I guess everybody would though. Thanks all for the advice. Really want to learn and do well.

[92redragtop]

You can sell enough to bank your profit and leave the original investment in.

If you think it's due for a correction (the market will likely correct so is this when you expect the pullback?) then why not sell everything and wait or short the stock for a few months?

[slow99]

I have already held it over 1 year so I think I am out of hot water thereright?

I may sell enough to get my original investment out and see where it goes from there. I would love to cash out and then get back in if it were to drop. I guess everybody would though. Thanks all for the advice. Really want to learn and do well.

Yes, a year you are in the long-term holding classification for tax purposes.

Since I don't know the dollar amount of your position, I have to offer the following. Think about how commissions eat into your return - especially since you might repurchase more shares later after you liquidate some of your current. If you have a $500 position and you round trip it at, say, $24 in commissions, that's almost 5% of your return eaten up. At low dollar amounts, you essentially get this levered effect. You make 10%, great - awesome trade - then give away half of it on commissions, not considering tax. I think this is the most common "wow" reaction I get from individuals who are asking me about stocks - they just don't think about it.

I've heard it all ... I've had guys tell me, "Yeah, no worries, I trade all the time, I do well," then they're telling me months down the road that some position is killing them because they put all their available funds in one stock and a 10% ($50) loss is killing them. I'm not shitting, I've heard it/seen it before.

[92redragtop]

People still pay $25 bucks per trade??

[slow99]

People still pay $25 bucks per trade??

I said round trip it - $12 a trade.

[Broncojohnny]

Do whatever you want and don't listen to other people except Slow99. No matter what you do, I would hope you have a better reason for it than "I think it is going to go down". Understand what you own, this isn't roulette.

My thoughts on Ingersoll Rand is that it is a housing play and the period a while back where you could buy it at $28 was a period when the market was acting very stupid. They came out with piss poor results and a shitty outlook right when everyone was worried about Europe. That price isn't much more than book value and it may not ever return to that level. I bought some at the same time and will never sell it unless I have a very compelling place to park the money that results, or if I feel it is incredibly overvalued (like three times book or about $80).

[92redragtop]

I said round trip it - $12 a trade.

Ah sorry, didn't see that. I pay less than $5 each way (discount e-broker) so even at $12 it's expensive.