Mebisode: When to Sell

What It Covers

Meb Faber explains when to sell investments, why most investors evaluate performance too quickly, and how to create rational selling criteria beyond recent returns.

Key Questions Answered

• •Evaluation Timeline: Plan to hold investments minimum ten years before judging performance, as Professor Ken French states sixty four years needed to confidently identify alpha generation in active management.
• •Winner Behavior: Vanguard research shows 94% of market-beating funds underperform in at least five years, and roughly half underperform seven years, meaning winning investments lose about half the time.
• •Halfsies Algorithm: When paralyzed by buy or sell decisions, diversify outcomes by taking half positions, buying both competing funds with smaller sizes, or spreading purchases across twelve months to reduce regret.