I was washing my hands in the restroom when a man in bermudas walked up to me.
He thanked me for pitching a US stock which had made him US$50,000 overnight.
Now, that threw me off.
Because I knew that particular stock had gone up only by single digits the previous night.
So, how on earth did he make US$50,000 in one night?
Then it hit me — I was thinking too small.
If you work the math backwards, this gentleman had invested close to US$1,000,000 into the stock.
That’s conviction.
Naturally, I asked what he planned to do with the stock position.
His answer? He’d sold it all.
The investor in me flinched.
I wanted to grab him by the shoulders and say, “Don’t do that!”
Everything I know about long-term investing was screaming at me to talk him out of it.
But it was his money.
His decision. So, I held my tongue.
Here’s the thing, though.
I recently checked back on the stock’s performance.
Had he held on, those shares would be worth roughly US$4,000,000 today.
US$50,000 versus US$4,000,000.
There’s no comparison, right?
Or is there?
The number no one talks about
Many will think that he made a mistake for selling too soon.
But I can think of reasons why that may not be true.
Because here’s what that US$50,000 could have bought him.
A family vacation.
Business class tickets. Two weeks at a five-star resort.
His kids, still young enough to want to hang out with dad, making memories that will last a lifetime.
Now, tell me — what is that worth?
His children won’t be small forever.
They won’t always be excited to go on trips with their parents.
That window closes faster than you expect.
And the truth is, the time you get to spend with your family is time you can never earn back.
Not with US$50,000, and not with US$4,000,000.
What should you do?
This story captures a struggle I face every time someone asks me: “I’ve made some nice gains on a stock. Should I sell?”
I’ll level with you.
I can’t give you a one-size-fits-all answer.
For sure, I can’t guarantee that every stock will go up three or four times over the next five years.
Nobody can.
But what I can tell you is this: the odds of making good gains improve significantly the longer you hold a quality business.
We’ve seen this play out in our own Smart Dividend Portfolio.
The portfolio bought DBS Group (SGX: D05) at S$19.34 in April 2020.
Today, shares are well above S$55, and the portfolio collected years of growing dividends along the way.
If the Smart Dividend Portfolio had sold at S$25 for a quick 30% gain, it would have missed the gains that followed.
That’s the case for patience, and it’s a strong one.
But it’s not the only case.
When selling makes sense
Here’s the part most investing articles skip.
If that US$50,000 funded something priceless — time with his kids before they grow up, a once-in-a-lifetime experience, a life goal achieved — then it may well have been the right call.
Even with US$4,000,000 sitting on the table.
Because investing is not a game you win by maximising every dollar.
It’s a vehicle that gets you where you want to go.
If you’ve arrived at your destination, there’s no shame in stepping off the bus.
At The Smart Investor, we’re advocates of long-term investing and dividend growth.
But we also recognise that the purpose of your portfolio is to fund a better life.
Not to chase a higher number on a screen.
Get Smart: What’s your stock gains for?
The next time you’re sitting on a nice gain and wondering whether to sell, don’t start with the stock price.
Start with yourself.
Ask: what will this money do for me and my family?
Is there something priceless that this gain can fund right now?
If yes, take it — and don’t look back.
If not, let the business do its thing.
The best companies reward patience with growing dividends and rising value over time.
Either way, be at peace with your decision.
Because in the end, no one ever regrets spending money on what truly matters to them.
Not even if it cost them US$4,000,000.
Markets are volatile again. Oil prices are rising and tech stocks are swinging.
What matters now is not predicting what comes next, but knowing how to act.
In this webinar, our Co-Founders, Chin Hui Leong and Joanna Sng, share a clear, three-layer framework for navigating uncertainty. Register your spot here.
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Disclosure: Chin Hui Leong owns shares of DBS Group.
