Knowing when to sell an asset is extremely important for building wealth. In trading, it can be argued that it is the king of the jungle. Selling too early or too late can haunt wealth builders. Getting the best price for an asset is almost impossible. But if you can get a price near the high, you can consider yourself lucky. Whether it is the stock market, the real estate market, or any business market, selling at the right price at the right time can mean the difference in the ability to become wealthy.
The stock market is a fantastic example of how knowing when to sell can create or prevent wealth. Recently, the trading blog Trading Futures ETF Options wrote about a trade in the S&P 500 ETF SPY and the Japanese Yen ETF FXY. Both trades had good entries. The plan for when to sell was another matter for both. Had the exit plans on both trades been executed properly, the trader would have made in excess of 3000%. A quick synopsis is below.
The goal for SPY trade was changed due to the mindset of the trader when it should not have. Profits were cut short. The profit was 10% when it could have been as high as 500% had the trader waited another couple weeks to let it work out.
The FXY trade was deja vu. The trade had a great entry. The initial goal of the trade was actually reached. But instead of letting the trade run, the trader sold at first blush. The trade made 100% but missed out on an additional 700% had the trader waited another couple weeks to let the trade work out.
Remember to understand your business plan before the need for a decision needs to come up. That way emotions will be kept at bay and the business can succeed at a higher level.