Course rocket or crackling: What should be the first thing to fly out of the depot?
Or both?
Or nothing?
Anyone who buys a share should be convinced of the company and its products.
Only then does it make sense to buy shares.
And the same should be done with existing positions in the depot.
Would I buy the stock again today?
If so, it should stay in the depot.
If not, it has no business there and should be sold.
Daniel Mohr
Editor in the economy of the Frankfurter Allgemeine Sonntagszeitung.
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The past price development should not play a role. Just because a stock price has doubled, which is nice, doesn't mean the stock has been maxed out. See Amazon, Apple, Tesla, but also many German stocks whose prices have multiplied over the years and decades. A price doubling can easily be followed by a further price increase if the company is successful and convinces with strong products. In fact, an uptrend is usually a strong buy signal for a stock, not a sell signal. It doesn't have to automatically go downhill at some point. And lost price gains are at least as annoying as price losses.
Conversely, a halved share price does not offer a higher chance or even guarantee that the share price will rise soon.
Most of the time, there are good reasons why the price has fallen.
It can go further downhill, up to bankruptcy.
Only those who are really convinced that the company can do more and are worth more should keep or buy the shares.
It makes sense to scrutinize your stock portfolio for possible sales and should be done over and over again from time to time.
Regardless of whether the money is currently needed or only temporarily parked until better entry opportunities are seen again.