Key to stress free investing – Have an exit plan

This applies even if you’re a buy and hold invest or (in fact especially if you’re a buy and hold investor). There is someone priceless about making a decision about the investment before your even buy in. Some investments have a very clear time period, for example bridging finance the legal contract will say you are loaning the money at a set interest rate for 4 to 6 months. Bridging finance is a nice clear one; you even have the exact of how much interest you will be paid.
But property, mutual funds, shares, commodities. You can buy and no one will ever tap you on the shoulder and tell you it time to sell. You are 100% responsible for working that out, ideally before you actually buy in to the investment. Stress comes from the indecision, the looking at the market looking at your investment then back at the market, and if you don’t have a clear plan for it, it a investment can feel like a stake out, your constantly looking wondering when.
This is especially important with the new dynamic of global financial markets, home runs and strikeouts happening in the same week. You need a cast iron stomach to just buy and hold. I have friends that ask what to do, they have to make their own decision and buy and hold is the easiest for them to get their head around. And you have to remember
This is the first rule I am now implementing in regards to investing to have a clear exit amount, ideally both a time and amount. I like to at least set a time date to sell. I need an exit in order to not get attached.