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When to sell your investment?

How do you know it’s time to sell your investment?

Selling an investment is rarely considered, even though there are countless investments and you can choose one more, if you want to invest. These are selected either by a consultant or by yourself, and each performs according to the cyclicality of its own market. Each has a planned time horizon, at the end of which you should either look for another direction for your capital or actually do better with cash.

When to sell your investment?

Investments may show large exchange rate fluctuations (volatility). That doesn’t mean you have to get out of there anyway. However, there are events when it is worth thinking about switching.


In this article, I will show you specifically when to sell your investment through the example of mutual funds, but these principles are also true for other forms of investment, only possibly the time periods are different.
Before deciding to sell solely as a result of this article, of course, consider other circumstances regarding your own unique situation. Because of its scope, this article is not suitable for covering everyone’s life situation.

If you invested money in a mutual fund a few months ago and you think you didn’t really put it on a good horse, then this article is not for you. At an investment fund, you have to be patient to see results. These are medium- and long-term forms of investment. In general, I can tell you that after 2-3 years you will see if your mutual fund is performing well.

1. How well does it perform compared to the benchmark?

The benchmark is nothing more than a sample portfolio that is very close to the one we have compiled. You know, we compare apples to apples, pears to pears.

In a good case, you will make the comparison before you direct money into the fund. Then this question may not even arise. Regardless, no one can choose with 100% security, so even with the utmost care, the situation can happen.

If the fund you choose has performed poorly over the past 1-2 years relative to the benchmark, then it’s time to rethink this investment strategy.
Here you may only need to modify 1-2 things, not sell the whole thing. Also, the fact that in the past the benchmark performed better than the solution you preferred is a warning sign, but it doesn’t mean you immediately sell what you’ve accumulated so far. This is because the market has cycles, with a falling trend, it may not be a good idea to monetize everything. Sometimes waiting is helpful for you.

Regardless, if your mutual fund has produced an average annual return of 12% over the last 1-2 years and the average was 15%, this is a good argument in favor of selling the investment.

If your mutual fund has achieved a sustained negative return, even though the benchmark is positive, I would definitely reconsider the sale before making more and more loss.

Think about selling if you are performing poorly compared to the same funds.

It’s similar to the previous one, only with the difference that here you are comparing to the exact same tools, not a sample portfolio. For example, you only and exclusively compare Chinese asset funds to Chinese asset funds. Your work here is a little different than before. There you compared an investment basket to your own, and here you “target” each mutual fund.

Comparing past returns, you can see that it is not uncommon to invest in the same area to achieve a completely different sign of results.
So if you chose the investment area well but put it on the wrong horse, you may need to switch.

2. Consider selling if it is performing poorly in a down market.

The bear market is nothing more than when exchange rates fall.

It may sound strange that anyone expects good performance when all the exchange rates are going down. In the case of a falling market, it does matter how much the exchange rate falls or has fallen in the past. Selling a less performing mutual fund speaks in favor of increasing your security if you don’t let it to fall deep.

Instead, you sell, realize the profits generated (if any). Then, if it crashes but you like it anyway, you’ll get back to the low point.

3. It is advisable to sell the investment if you have not selected it according to your own level of risk.

All people make mistakes. Thus, as an investor, you can make the mistake of not choosing an otherwise well-functioning investment fund commensurate with your own level of risk. Then you are in favor of selling the investment, that in case of under-selection you can achieve more returns elsewhere, and if you take too much risk, you will sleep more peacefully later.
If your investment is doing well anyway, the risk is just too high for you, you can do that leave a small portion of your money here. The part where it doesn’t really matter where it is, kind of “play money”. This is when you have the opportunity to learn and experience it all without calling the ambulance on hearing all the news.

4. The investment policy or the fund manager has changed.

It is not common, but it is not excluded either. If the new investment direction is not right for you, this is a good reason to sell.

I would consider selling the investment even if the fund manager has changed and you may not trust it. It’s obviously not legal here, but it’s haired to point 3. This is when it will probably no longer be your preferred level of risk.

5. Reassess your investment if you have reached or are very close to your financial goal

Don’t let it to the last minute, the price of an investment fund move. You’d rather take your money a half year earlier than necessary rather than maybe get stuck because of a market downturn (and so you might have difficulties at reaching your goals as well).

Financial planning is very important, the closer you are to your goals, the less volatile an instrument you choose. Obviously not at once with all of the capital, only with a growing portion. You can achieve this with the diversification you need here as time goes on.

6. With the help of an expert or you are yourself, but you are actively managing your money.

It is part of active management that you trade regularly, so once you reach a certain level, you sell the fund just to make a profit. Later, of course, you can even return to the same fund without further ado.

If you have the right expertise behind you, the selling can be a good idea, if you may want to buy a riskier but higher-yielding asset (such as individual stocks) for some of the money you have accumulated in the mutual fund.


  1. Which point would you apply and which would not be at your own investment?
  2. Has there ever been a case where you decided to sell your own investment? What was the result?
  3. What reason can you bring while retaining your investment, even at the cost of losses?

Selling an investment can have a serious impact on your future results. So if you have any questions, you can contact us here. Then, in a face-to-face meeting, we’ll review where you’re going now and what the outcome of your decision might be. This will make it easier for you to make a good decision.

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