I think snowy's idea of just holding is probably the best bet for investors that have neither the time and/or inclination to follow markets closely. But I think a blanket statement like "selling and buying back in isn't a path to wealth" isn't necessarily factual. I think an actively managed account in the hands of a skilled trader will usually outperform a passively managed account. If that weren't true, would wealth advisors and hedge fund managers even exist?
I think there is certainly a case to be made for "taking your profits" in a booming market, especially if you have reason to believe that the equity you are invested in may be overvalued. For example, in the past year or two we have seen some insane runs on certain tech stocks. Look, for example, at MU, which has posted gains of nearly 600% in the past year alone. Or how about SNDK, with their yearly gain of 3,542%? I think if I had bought a chunk of SNDK when it was going for around $100/share this past September, I would be looking to take my profits on it now that it is sitting at $1187 a share. Why? Because how much room does SNDK really have to grow right now? It's possible there is a bit more upside for it in this AI craze, but I would feel much more comfortable taking that guaranteed gain and reinvesting it a security that I believe is undervalued and has more room for growth.
To be clear, I'm not advocating taking the gains and then sitting on the money with it uninvested waiting for SNDK to drop... I'm suggesting reinvesting the gains in a company with more room for growth.....
