Logic behind holding stocks

[scp]

Also, can someone explain why I'm better off holding stocks instead of selling at a loss, then buying at a deeper discount (including commission), e.g. are there tax implications (besides, wouldn't it help if I made a loss)?

For example, if I bought 15 shares of GS at $70 and sold them at $60, then bought them back at $54 (and it costs $5/trade), then I would have saved $90. If I'm monitoring the stock anyways and think I can get the above prices, then why wouldn't I?

[banditfist]

You can tax loss harvest. When you sell at a loss, you can claim that. However, you cannot buy back the stock within 30 days. So, only if you know (you won't) that the stock will be $54 in 30 days can you take advantage of tax loss harvesting.

When you are dealing with so few shares, you are going to kill yourself in transaction fees.

[sweeps]

If you could reliably predict the future and knew in advance a stock was going to fall, then yes, it would be better to sell it (or better yet, short it) and then buy it back later.

[Broken Arrow]

Good responses. I haven't much to add except that, scp, do you keep a trading journal?

Every time I make a buy, I would write down when, how many shares, at what price, and most importantly, why I bought it and what results I am expecting.

Every time I make a sell, I would write down when, how many shares, at what price, and most importantly, whether or not the trade worked out as I expected.

Reviewing my journal has been extremely informative. Among other things, it has helped me clarify on what I can and can not expect and why.

For example, with all due respect, you are talking about what you think might happen or what you know has already happened in hindsight. But what about tomorrow or the day after that? That's the number that really matters. What is the stock price in a day or two from now? I urge you to give it a shot and write down the stock price of, say, GS in two to three days from now, and check it then.

It's rather ironic actually, that the more experienced I become with trading stocks, the more I realize with increasing clarity, what an ultimately futile effort this may be. To finally be able to see so clearly now, the subtle but glaring gap between the desire and the belief in being able to predict future trends, and my clear inability to actually be able to reliably do so....

In fact, so glaring is this point that my trading strategy has now evolved to point where it takes absolutely no consideration of supposed future pricing as a factor. Be it a target price from an analyst report or just some average Joe trader throwing numbers around, I ignore them all.

But we all have to find our own path, and I am by no means an expert in this matter, so please don't take my word for it. Please feel free experiment and if you do find a reliable way to predict future pricing, by all means, please share it with us.