Zico's Advice For HK and China Stocks : When Is The Right Time To Take Profits


As a follow up to last week’s Zico’s Recap For 1Q15 : A Pause To Look At What’s In The Bag.

2828 HK
China Tai-Ping Life 966 HK


When is the right time to take profits
The answer to when is the right time to take profits is one of the most difficult investment questions to answer. And yet it is probably more important than the decision or process to choosing which is the right stock or market to buy. The sell decision is often neglected and there are very few “investment” books out there that even attempt to answer it. Human behaviour is such that selling is about “closing” and it is deem as less exciting than buying which is seen as “opening”.
The goal in investing is about making money and until one sells, it is always marked to the volatility of the markets. Sometimes it is even more prudent to sell out of a losing position if the best forecast is that the price will continue to fall.
Today the question is whether to take profits in the China/HK stock portfolio. The gains in that space have been big, and while the liquidity from the mainland Chinese investors could carry the market higher, there is nothing wrong about taking some gains off the table.
This is the key part about achieving positive returns from investing in stocks.


A Bit About Zico
Zico is our in house equity consultant who is currently a private fund manager with more than a fair share awards in the course of his illustrious career.
Having managed both global and also regional themed equity portfolios, he specialises in stock picking that maximises returns for his various absolute return portfolios.