WolfgangPauli wrote:...Do I chalk this up to luck...
I think you should. What is your evidence, other than outcome, that it wasn't?
[should I]..take the tax hit and liquidate?... Do I keep and ride - still just consider this to be "fun"...
Nobody can answer that but you.
I'd suggest that the (ambiguous) evidence I've seen on skill on the part of professional managers, who spend their working lives on this stuff and have access to information resources you and I can only dream of, is that professionals might
be able to add 0.5% to 1% in alpha before costs
. Maybe not, but if they do
it's only 0.5% to 1% in annualized return. Yeah, I can do the compounding and maybe that should be regarded as a big deal, but it's 0.5% to 1%. It's not 5%/year, 10%/year, 20%/year.
If you have beaten the market by 8%, then I would suggest that a reasonably modest person might attribute 1% to skill and 7% to luck.
I would also suggest that you examine carefully the amount of "fun" per dollar
you get by doing this, taking into account the possibility that you may not always succeed and you may experience "negative fun" in future. I honestly just don't get the concept of "fun" in this kind of context, and suspect that the "fun" is based on the idea that you will in fact win and denying the possibility of painful loss.
Sometime maybe twenty years or so ago, I formulated an idea. The idea is that if I look a dollar number on my brokerage statement and begin to think of it as if it were really dollars
and count on it in my planning, then the only rational thing to do was to turn it into actual dollars by selling.
that falls under the heading of "irrational but I personally have done it" is to say "I am now cumulatively 26% ahead. I will continue to keep careful records of my performance relative to the Total Stock Market index fund. I will decide that I am willing to give back half of my gains (or any other desired amount). If my accounting ever shows that I am only 13% ahead I will sell at that point."
Of course plunges can be very
sudden but I think you can stay in your investments and still be reasonably sure
of keeping some of your gains if you can be brutal and follow through on selling as soon as you are only 13% ahead.
By far the biggest danger in your situation is coming to believe that you really are a stock-picking genius.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.