Cashing out at the right time

This article brings in a perspective about getting out at the right time and breaking the vicious investment cycle happily. Cashing out is as important as Investing, but no one tells you that .......

The stock market is a dream world, I remember growing up watching the quotes of companies speedily running down the screen of business channels. After lottery it is termed as the one which can make you really rich, I mean look at all the Billionaire's, their >80% net worth is fully dependent on their stock holdings.

As shown in the movie The wolf of Wall Street it's all a "fugasi", you are never bored of it, and you never stop at a particular return you get on your investment. It's just like a casino you win bets, you keep betting only to realise you loose most of the profits you made and wishing to cash out with the money you started with.

All big boys and books tell us about investing no one tells us the right time to cash out. It's just like a fruit you wait for it to ripen and you should eat it at the right time else you would be eating a rotten one.Also one reason to remove investments at the right time is Life is very short half of the adventurous stuff you are doing now you won't be doing 10 years from now the trips to see the aurora borealis might go farther and farther.The point I am making is you should keep a particular target and once it is acheved you should cash out at least half of it and enjoy life.

More than half of the long term investments were started with a thought of short term gains and once the gains turned negative the investor had no option but to hold for the long term and put up a brave face, because everyone wants to get rich within a short time, but they are stuck as they do not have the courage to book losses.

Here is a thing which no book would tell you, when to cash out and the fact that if a stock falls 50% from it's peak it has to rally 100% to break even from the buy in price. and the rise is more difficult because now the circuit breakers must have kicked with reduced daliy percentage movement, the stock price which moved in the band of 20% when the fall started now would be reduced to 5% when the upward journey begins only if there is one.