1. Actually, selling stocks is an art, as there's no point saying you have made a profit on your holdings until you sell.
2. At the end of the day, it’s cash in the bank that counts as wealth, not the marked-to-market profits in your stock portfolio.
3. In addition to getting rid of "dud stocks" when there are other "market fools" to lap them up, there are several other reasons to dispose off your stocks.
4. When a stock price runs up too high too soon much beyond your target price, due to a random news item or sheer market speculation which have nothing to do with the company, it would be better to "pocket your gains" and buy it back at a lower level once you are absolutely certain about its prospects.
5. You could also consider dumping your under-performing stock if you are convinced of the potential of another stock to earn higher returns, without committing the mistake of encashing your winners for this purchase.
6. At times, there are personal reasons for disposing off a stock, like for portfolio re-balancing, change in your risk appetite, overgrown stock portfolio, or the stock having become too volatile for your liking.
7. A tip for routine profit booking in a "heated" market:-
a) Sell half your stock when your price target is reached.
b) Sell another 10% every time the stock rises by 10%.
c) If price continues to rise, find the reasons and revise the target, if required.
d) If price falls, find if it is random; if not, revise your price target for selling.
8. Simply put, you should sell a stock when you see no more "logical" or "rational" value left in it - as you can always buy it again after dispassionate evaluation.
2. At the end of the day, it’s cash in the bank that counts as wealth, not the marked-to-market profits in your stock portfolio.
3. In addition to getting rid of "dud stocks" when there are other "market fools" to lap them up, there are several other reasons to dispose off your stocks.
4. When a stock price runs up too high too soon much beyond your target price, due to a random news item or sheer market speculation which have nothing to do with the company, it would be better to "pocket your gains" and buy it back at a lower level once you are absolutely certain about its prospects.
5. You could also consider dumping your under-performing stock if you are convinced of the potential of another stock to earn higher returns, without committing the mistake of encashing your winners for this purchase.
6. At times, there are personal reasons for disposing off a stock, like for portfolio re-balancing, change in your risk appetite, overgrown stock portfolio, or the stock having become too volatile for your liking.
7. A tip for routine profit booking in a "heated" market:-
a) Sell half your stock when your price target is reached.
b) Sell another 10% every time the stock rises by 10%.
c) If price continues to rise, find the reasons and revise the target, if required.
d) If price falls, find if it is random; if not, revise your price target for selling.
8. Simply put, you should sell a stock when you see no more "logical" or "rational" value left in it - as you can always buy it again after dispassionate evaluation.