The Tough Part About Investing: When To Sell
My first post about ETC was on April 22nd when ETC was at $30 (Ethereum Classic: Finally Starting to Pay Off).
My second post was on May 5th when ETC was at $75 (Ethereum Classic > DogeCoin).
As of this writing on May 7th, ETC is at $122. It hit an all-time high today of $175 on Coinbase.
I articulated my initial price target was for $250 by the year 2025…
But when growth happens way faster than expected, I’ve had to consider potentially taking some profits off the table.
My rationale is that my rate of return looks much better in 2021 than if I were to average it over four more years until 2025. ETC could also go to zero so given the rapid rise in a small period of time, it made sense for me to take some profits.
I sold about ~1/5 of my position at $128 and another ~1/5 of my position at $141. These profits represented a ~22X on my initial investment as I bought in at ~$6 an ETC.
I still have about half my original ETC position and I’ll see what happens! With knowing that I at least generated ~22X on this investment, I feel safer if the rest goes to $0. But, if it goes to $500 or $1,000, I will still have major upside.
The asset long term makes sense to me and I really do think it will be worth a lot as crypto booms over the next decade. It just didn’t make sense to have such a concentrated position in such a short amount of time.
If it would have grown slower, maybe I wouldn’t have sold as much at this price.
But that’s just not how this stuff works.
When it rains it pours.
When assets get momentum, they get momentum.
This sale represented the largest sell in my early investing journey. It’s a meaningful occurrence and I had to take it.
A few months earlier, I saw insane gains in Tilray (see Tilray Update #2) and I didn’t take profits on the way up. Sure enough, it came crashing down and now it’s hovering around my buy price. I haven’t sold it yet though but I could have taken some nice profits.
On the other hand, I sold a majority of my Tesla stock position when it went up 3X in end of 2019 / early 2020. If I would have held for just another few months when Tesla boomed in 2020, I would have seen a ~16X.
Part of becoming a good investor is learning along the way what feels right for you on when to sell. That comes with experience.
When I saw this meteoritic rise the past few days in ETC, it stopped me in my tracks. I felt compelled to make a decision.
I spoke to my dad and two of my friends who both owned a lot of ETC well before it was popular. It felt helpful to get my thoughts out with them.
After doing some thinking, I decided to conduct my largest earnings in a trade and be happy with it.
If it goes up significantly more, I’ll be happy with that too. :)
Really enjoying reading your insights and reasoning on when to take profits. Working on similar questions, and reminding myself of the value of the entire learning curve.