Every now and then I watch “Mad Money” with Jim Cramer on CNBC. Since I don’t watch much TV, financial programming is pretty much what I gravitate to.
Now, Jim Cramer has helped many people – and still does every day. His show has been wildly successful over the last 14 years. He is very wise regarding the stock market. I am quite often in agreement with him.
However…he sometimes gives advice that makes me cringe in my chair.
The piece of advice I want to address today is the idea of selling your original investment once you’re up 100 percent.
For example, let’s say you invested $1000 in a stock, the price doubles, and your investment grows to $2000. He’s saying that you should sell $1000 worth and let the rest ride.
Here’s the problem I have with that. Suppose you invested in Amazon, Netflix, Booking Holdings, Home Depot, or Walmart. Had you done what Cramer suggested, you would have left hundreds of thousands – in some cases millions – on the table.
Yes, from a $1000 investment you could have left a great deal of money on the table over a lifetime!
If you’re fortunate enough to buy a stock, and the price doubles, please hold on!
We measure investment success in percentages gained over a period of decades.
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