General Electric (NYSE:GE) has taken its investors on an excruciatingly wild ride over the past few months. Shares of the industrial giant plummeted more than 50% last year because of the impact of weakening market conditions on its power business, which put pressure on the company's balance sheet. This year, though, has been a different story, as GE's stock has rebounded more than 40% after the company unveiled a series of solutions to help solve its debt problem.

All this volatility likely leaves current GE shareholders wondering if they should do something -- whether that's selling their shares into the recent rally or doubling down in hopes of boosting their profit potential as the rebound continues. However, doing something is the worst mistake they could make right now, since the company is still very early in the turnaround process. A better course of action would be to stand pat and wait to see how things play out. Here's why.

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The case against selling now

Shares of GE have bounced back big time from their bottom toward the end of last year, as new CEO Larry Culp made good on his promise to "move with urgency" to strengthen GE's balance sheet. He has done so by agreeing to monetize several assets, including unloading part of its stake in oilfield services company Baker Hughes (NYSE:BHGE), merging its transportation division with Wabtec (NYSE:WAB), and selling its biopharma business to Danaher (NYSE:DHR). These transactions have helped solidify GE's financial foundation, which makes it seem it has turned the corner.

Meanwhile, the company retained significant value in the way it engineered these transactions, since it still owns a 50% stake in Baker Hughes, kept a roughly 25% interest in Wabtec, and no longer needs to complete an IPO of its healthcare unit after selling its biopharma assets to Danaher. Now the company can wait until market conditions improve before it considers monetizing the rest of these businesses.

While it might be tempting to sell into GE's recent rally, that could turn out to be a big mistake, since it would mean giving up on the company's intriguing upside potential as Culp continues engineering a turnaround.

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Image source: Getty Images.

The case against doubling down

On the other hand, as GE's value proposition becomes more apparent, there's probably a temptation among some shareholders to consider buying more shares to add to their position even as the stock rallies. That action could also end up being a big mistake.

For starters, while GE's CEO has done an excellent job addressing the company's balance sheet, he has yet to solve the problems plaguing the power businesses. The company has made it clear that its power business will probably continue to drag down its results in 2019. As a result, cash flow is likely to remain under pressure this year. That decline could eventually put some renewed selling pressure on the stock price, especially if the enthusiasm from the company's balance sheet improvement efforts starts wearing off. While GE hopes that cash flow will start rebounding in 2020, that assumes it can turnaround its struggling power business and that the global economy doesn't slow down any further, which are no sure things.

Another issue with GE is its unclear value proposition. While the conglomerate has been working to simplify its portfolio by jettisoning assets, it's not yet apparent what will remain as part of the new GE. For example, while GE initially said it would complete an initial public offering of its healthcare unit, that idea now appears to be off the table after the company sold its biopharma business to Danaher. It's also not clear what the company plans to do with its stakes in Wabtec and Baker Hughes as it could spin them off to shareholders or sell them off. Until the company presents a clear picture of not only the makeup of the new GE but also its earnings power, it doesn't make sense for investors to buy more shares since they don't know exactly what they're getting with GE.

Just be patient

GE has seemingly been making headlines every day, either because of the volatility of its stock price or because it made some strategic move. All that movement probably has current investors wondering whether they should make a move of their own. However, taking action, whether that's selling out or doubling down, would be a mistake, because there's still so much uncertainty. Investors either risk missing out on further upside or adding to a situation that remains unclear. That's why I think it's best for investors to sit tight right now and see how things unfold. While they might miss out on some gains, patience would also prevent them from making matters worse.