When Do I Sell? 4 Factors to Help you Decide

People say BUY low and SELL high, but how can you tell when that is? 

Trying to time the market is a gamble.

The financial news is all doom and gloom and you aren’t sure who to listen to.graph-36929_640

Emotions are running high and people are selling because they are afraid of losing everything.  It is hard not to get caught up with the crowd.

Investors who sell out of fear tend to sell at a lower price.

 When I invest in the stock market, I make a BUY PLAN and a SELL PLAN.  Learning how the market works is a great first step.

 

My BUY PLAN lists the reasons that I am buying the stock. 

  1. I like quality stocks with dividend income.
  2. I buy to hold for the long term.

 

Make a SELL PLAN when you buy the stock.  

  1. You could plan to sell using the Trailing Stop method.
  •                  Watch your stock price as it goes up and down.
  •                   Keep track of the highest price it ever reaches.
  •                   If the stock ever drops 20% below the highest price it ever reaches, sell it.
  1. You could plan to sell when the company cuts its dividend. Cutting a dividend can be a sign that they are expecting lower sales in the future.
  1. You could plan to sell when the stock reaches a target price.  When you buy the stock, you set the target.  When you reach the target you sell it.
  1. You could plan to sell some stock when the price of the stock doubles. Some advisers recommend selling half of your stock when that happens.  You then get your original investment back.  You can reinvest that money in a new stock, or keep it for other purposes. 

statistics-822232_640Having a SELL PLAN helps keep the emotion out of your selling decision, but remember to take into account other signs that it might be time to sell.

Remember what your investing goals are and stay true to your plan.

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When do YOU decide to SELL?

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