The dilemma of Booking Profit or Not

in LeoFinancelast month

Markets are at an all-time high and as a cautious investor, I am like many others are in the dilemma of booking the profit or not. I am into a long term investment, which means I can remain invested in like 10 years. But the problem is if I can book some profit at ATH and then reenter the market when it is low then the profit might be doubled. This is timing the market which I cannot do or anyone. I have not heard anyone who has timed the market and earned fortunes, but again when you feel that you have some nice profits then it's good to book some profit.

After the 2020 pandemic, we are seeing a lot more money flowing into the market, the asset prices are skyrocketing even though there are threats like chip shortages, trade disruptions and supply and demand differences. Many feel that there is a big market crash is on the horizon but no one knows when if it is now or after a year. Also, inflation is making it worse for middle-class people like us where the income is stagnant but the expenses have shot up like anything. The petrol and diesel prices are at an all-time high and so to the cooking oils.

The markets here in India is doing quite good with all the retail money flowing into the market but the problem is to what extent the money can flow. There can be a situation where the money will be stopped and everyone will look for profit booking and the market can crash because everyone will be doing the same.

Now I am also in the same dilemma is that should I book the profit or not. I am still thinking of the last bull cycle when the Bitcoin was at $20000 and then it came crashing down to $3000. If I would have booked the profit at $20000 and reentered when it was $3000, I would have little more Bitcoin which I have now. I do not have the regret of the past but I am thinking the same thing for the present what if this is the half of the bull cycle or what if it is the end of the bull cycle. No one knows and neither does I, but should we start booking the profit little by little.

The problem is I tried booking the profit in one of the shares (IRCTC) and though there was profit I could have earned 50% more profit if I would have waited a little longer. As you can see I have bought the shares when it was around 1400 and then sold it when it was 4000 more than 150% profit but I could have got around 300% profit if I would have waited for some more days.

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Now, what will happen if I book now and the market crashes or if it goes and creates new heights, though it's not in my hand still taking the decisions is in my hands and those decisions defined the wealth you create in the future. Thus this is the reason I am in the dilemma of booking the profit or not.

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