Your stock is up by 20 percent, maybe even 50 or 100 percent.
Should you take the money and run?
What about if your stock is down?
Still a little unclear on what all the information on the stock quote means? Learninghow to read a stock quotewill put you in a better position to know if you should buy, sell or hold.
All these questions are running through your mind, and rightly so.
Youre in the stock game to make money so making good decisions about when to sell stocks is important.
In this story, well run through three reasons to sell and three reasons to ride it out longer.
Good ideas are hard to find, so stick with them until theres powerful reasons to sell.
Just because a stock is down doesnt mean its out.
Conversely, a stock jumping over the moon doesnt necessarily mean its time to put in that sell order.
A stock can continue to go up well past your original target price.
Stocks dont have a maximum.
They have (theoretically) unlimited upside potential.
You put in the time to research a company and maybe even read through its financial statements.
Perhaps youve used the companys products and think theyre the bees knees.
You took the plunge and bought at what you hope will be the right price.
Save yourself from more investment decisions than necessary by being very slow to sell.
No Interest Til Almost 2027?
Balance Transfer = Credit Card Cheat Code
Stock sales may also trigger tax consequences.
3 Good Reasons to Sell
Here are three signals that you should consider selling your shares.
That could delay or even prevent you from realizing all those hard-won gains.
You didnt intend to buy a food stock when you originally bought Apple.
The same is true of major mergers and acquisitions.
When a profitable company starts losing money, its concerning but not automatically a reason to sell.
If coffee growers have bad harvests, Starbucks profits might decline.
Those are temporary issues.
Dont be too quick to sell a good stock going through a rough patch.
If the company commits a fraud, sell.
Dividend cuts are bad news for income investors.
Its time to enter that sell order.
Its tough to admit were wrong.
Its even worse when we sell and the stocks price recovers or even goes higher.
But all it’s crucial that you do is be more right than wrong.
Dont reevaluate stocks that failed expectations.
Sell and move on.
It Feels Good to Take a Stock Market Profit
This goes back to good ideas being hard to find.
Spending the profit means youll have less money to invest.
Your next investment might not turn out as well.
If your stock reaches your target price, thats great!
Perhaps it can go up even more.
Human nature makes investing tricky.
We hate losing money.
We can also get jumpy when we feel as if were missing out.
Work on using rational judgment.
Its often impossible to tell the difference until the money is lost.
How often do you see anyone say I dont know on the internet?
Internet groups are susceptible to what psychologists call feedback loops.
Thats when enough people share a belief that others join the bandwagon.
Consistent Investors are Winning Investors
The list shared here is only a start.
Over time, every investor learns their own investment philosophy.
Some investors look to buy shares of companies that are priced below what they may be worth.
Others focus on companies that are growing rapidly.
Those two groups will have different ideas when to sell a stock.
As you continue to invest in the stock market, youll develop your own buy and sell signals.
Once you do, its important to stay consistent.
Markets go through periods (sometimes years) when even the best value stocks will underperform.
Other times growth stocks will be in the doghouse.
If you keep changing your strategy, you could find yourself continually on the wrong side.
Professionals accept that sometimes the market is with you and other times its not.
He is an adjunct professor of finance at Wayne State University in Michigan.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
Ask one of these companies to help…
