Everybody talks about ‘Buying’ & ‘Holding’, Investing for long! But we rarely hear about ‘Selling’. When is the right time to trim your portfolio, book some profit and sell that stock without losing on the potential upside. Lets explore.
- When News Haunt – When there is a lot of news around a stock and all you hear are bad then it is worth revisiting it. And upon rechecking if there is no hope that Business will improve anytime soon than you may consider Selling it.
- When your Target is reached – Now contrary to the advice by legendary Investor Warren Buffet sometimes forever is not the best time to hold a Stock. When you start adding a stock in your portfolio at cheap valuation and it reaches a particular set price target then you can consider Selling it.
- When your goal is no more aligned – Lets suppose you bought on to that particular company because you saw it Investing in EV (Electric Vehicle) but then suddenly after few months or years you see the interest of the company change, they no longer are focused in EV, so it is probably the right time to leave that stock and move on.
- When it keeps on hitting those red marks – When a stock keep on depreciating, giving you losses after losses, then you may think how low can it go. Well probably it can go to Zero! So if it is not a sound decision get out of it asap.
- When you need liquid – When you need money to meet your basic necessity, or you came across a new better investment, or maybe you have an emergency then you have all rights to sell off your Investment. But don’t forget that you may loose on potential future gains.
Bonus tip – If you are buying into direct stocks than you should have a Investment strategy in place on when to buy, hold or sell. Each stock is unique in its own, and may be worth holding it as per its industry, segment or operations. The best thing you can do is to do a thorough research and as long as the company performs good, you don’t need to free up that money, you should keep holding!
To read more about Investing:
- Where to Invest your money?
- To Dos of Investing
- Mistakes every Investor should avoid
- Unusual Investments