When To Sell a Stock

Knowing when to sell is often the most difficult part of buying and selling stocks. When a stock goes down, it is often difficult to admit that you made a mistake. When a stock goes up, will it keep going up? It is easy in hindsight to think that you should have held onto stock when you see it go up after you sold.

Selling Stock..... should you?

You generally don't know when a stock has really reached its peak, or whether it will go back up again, but there are some things to look for. Remember the reason you bought the stock. Considering all currently available data, is that reason still valid? Try to avoid coming up with new justifications for holding a falling stock. If you bought the stock, because you thought the company's new product would do really well, and it hasn't it may be time to sell.

There is nothing wrong with admitting you were wrong. However, you also need to be careful you aren't just selling to buy into the latest fad, either. The way the stock market works has been fairly consistent for many years. Different sectors have become hot, and later become not so hot. If you are going to revise your strategy, make you sure you still consider long term trends.

However, if something doesn't continue to fit your strategy, sell it. It doesn't matter if it has gone up a lot, or is almost worthless. Unless, you still think it fits with your strategy sell it. Remember, just because it may have a chance of going up a lot, doesn't mean there isn't another stock out there that is better. Selling based simply on past performance is generally a bad idea.

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