To The Moon

When I first started investing, I opened my first trading account with Webull. At that time, I was eager to learn about the stock market and read numerous articles and forums online. Through my research, I quickly concluded that the investors who consistently made significant profits were usually those who had the patience to hold their stocks for the long term. Inspired by this notion, I decided to adopt a long-term investment strategy. I wasn’t interested in day trading or flipping stocks within hours or days. My goal was to find solid companies, buy their shares, and hold them for the long haul, trusting that over time, their value would appreciate.

The Early Successes of Longer-Term Investing

My initial strategy seemed to work well. One of the first stocks I bought on Webull was FFWM (First Foundation Inc.), priced at around $4.37 per share. I patiently held on to my position, watching the stock price slowly climb. After several months, I sold my shares for around $9.87—almost a 126% return on my investment. I felt confident in my strategy, and this success motivated me to stick with it.

Another stock I purchased using Webull during this period was HomeStreet Inc. (HMST), at about $5.14 per share. Again, I played the long game and held on, not tempted by short-term fluctuations in price. After many months of watching the stock steadily grow, I eventually sold it for around $14.20 per share—marking another nice gain. These early wins further cemented my belief in the power of longer-term investing.

The Market’s Volatility: A Wake-Up Call

However, as I gained more experience in the stock market, I began to realize that long-term investing wasn’t always the golden ticket to consistent profits—especially in a volatile market. The U.S. stock market is known for its unpredictable ups and downs. There are periods of rapid growth followed by sharp corrections, which can significantly impact long-term investments. I found that holding stocks for the long term in such a turbulent environment increased the risk of substantial losses.

Moreover, the longer I held onto certain stocks, the more the ups and downs seemed to take an emotional toll. The fear of watching your investments drop in value, even if temporarily, can be difficult to stomach. It often made me question my strategy and whether the risk was worth the potential reward.

The Allure of Short-Term Trading

As my knowledge of the market deepened, I started to see the benefits of short-term trading. Unlike longer-term investing, which can be a waiting game, short-term trading allows me to take advantage of the market’s volatility. If I can buy and sell frequently at a profit, I not only grow my portfolio but also create the opportunity to reinvest my earnings into new opportunities. This compounding effect can amplify profits over time—especially if I’m consistently making the right trades.

I’ve since incorporated more short-term trading into my strategy, adjusting my focus to react to market conditions rather than sticking to a rigid "hold forever" mentality. The flexibility of buying and selling based on market trends and technical analysis has allowed me to stay nimble and more responsive to changes in the stock market.

The Right Time to Sell

A great example of when selling has paid off for me is with FFWM (First Foundation Inc.), the same stock I had held for several months and sold for a substantial profit. I’m actually glad I sold when I did because the current price of FFWM has dropped to around $5.07—much lower than what I sold it for. Had I decided to hold on to it longer, I would have risked losing most of the gains I had made. This experience taught me the importance of not getting too attached to a stock just because it was once a winner. Timing can make all the difference.

First Foundation (FFWM)

Unrealized Profits: The Double-Edged Sword

One of the trickiest parts of investing is managing unrealized profits—the gains that look great on paper but haven’t been locked in yet. For a long time, I found myself reluctant to sell stocks that had appreciated. But the reality is that unrealized profits are just that—unrealized. They can evaporate quickly if the market turns, leaving us with nothing but regret.

Sometimes, the longer we hold on to unrealized profits, the greater the risk of watching them turn into unrealized losses. In this sense, it’s important to strike a balance between holding on for potential future growth and knowing when it’s time to take the money off the table.

The Psychological Aspect of Investing

Another crucial lesson I’ve learned over time is the psychological aspect of investing. When we’re sitting on significant unrealized profits, it can be hard to make a rational decision. The fear of missing out (FOMO) often creeps in, and we start to wonder if the stock will continue to rise. On the other hand, if the stock price begins to fall, the fear of losing our gains can cause us to sell prematurely, missing out on the rebound.

Developing the ability to separate emotions from decisions is essential. A solid investment strategy that balances longer-term holdings with short-term trades, and one that includes setting profit-taking targets, can help keep emotions in check. This way, we’re not simply relying on our gut feelings, but making decisions based on our financial goals and the market conditions.

The New Approach: A Hybrid Strategy

Looking back on my journey, I’ve learned that there’s no one-size-fits-all approach to investing. Longer-term investing can still be a powerful strategy, especially if we are investing in companies with strong fundamentals and growth prospects. But in today’s fast-moving, volatile market, a hybrid strategy that incorporates both longer-term and short-term positions might be the most effective way to maximize returns.

If we're in it for the long haul with strong convictions about our investments, then holding might make sense. But if the market is fluctuating wildly, and we are able to capitalize on short-term movements, then buying and selling strategically can help us grow your portfolio more quickly.

Final Thoughts: Buy, Sell, or Hold?

Ultimately, whether to buy, sell, or hold your stocks with unrealized profits depends on our investment goals, your risk tolerance, and our ability to adapt to changing market conditions. The key is to remain flexible and be willing to evolve our strategy as we gain more experience.