One of my investing fears is selling too early. Imagine selling an asset one day only to see it rally over the following weeks 500%. There are a few different strategies for dealing with this fear, which I’ll delve into below.
Moon bag
The first strategy is the moon bag. This just means keeping a small bag after you sell the asset in question. This small bag might range anywhere from 10% to 25% of your original holdings. It’s called a moon bag because you think there’s still a chance the asset could go on to put in a 5 or 10x or, in other words, go to the moon. This is a good strategy when selling and one I sometimes use. I like this strategy because it allows you to take profit while maintaining a finger – be it a small finger – in the pie. If the moon bag goes to zero that’s fine as you took profit on 75% to 90% of your original holdings. You can sleep easy at night when you adopt this strategy.
Hodling
I definitely wouldn’t apply the strategy of hodling to every investment you make but for some assets it works. Hodling means to hold an investment for an indefinite period of time with no intention of selling. Hodling seems to work best with high-quality fixed-supply assets, such as Bitcoin and gold. Hodling should also work well with index funds as most stock market indices go up and to the right over a long enough period of time. Don’t hodl high-risk assets, such as most of the coins in crypto. With these you want to be in and out pretty quickly. ‘Quickly’ means months or possibly years; it depends on the high-risk asset. Why? Just go and take a look at a handful of crypto charts; you’ll see most trend to zero.
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