Know When to Sell Your Stocks Articles | Investing

By: Guy Starbuck

After spending all the time, energy and efforts in doing research on which stocks are the best buys, the first-time investor is sometimes at a loss when to pull out while the going is good or bad. The good news for stock selling is that if you have picked up some really good stocks do not even think of pulling out or selling them, for a very long time. This means, till such times you retire perhaps. Of course, there are some special situations when you have to sell your stocks and should not wait for an opportune moment, which can be much before you have reached your personal financial goals.

Usually the stock broker will advise you to sell off your stocks when the prices are about to slump. But this need not be the right decision to take at that time.

Stocks by nature tend to go up and down, depending on the economic scenario or the country as well as global economy. On the other hand, the economy is also dependent on the stock market. This inter-dependence may make stock market slump or even bounce back with rapid succession. That is the reason it is rather difficult to judge whether it is the right time to sell or just hold back.

The way you researched to find the right stocks to buy – you also have to keep a tab on the pulse of these corporations. Many factors affect the stock market. A new CEO joining, a merger, a sizing down operation, a plummet in the industry to which the company belongs, and many such internal as well as external factors affect the stocks of a company. Be that as it may, there are essentially three broad reasons for selling stocks.

The number one reason is when you have reached your financial goals. If you have reached retirement age, you might decide to pull out of the stock market and put away all your earnings to a safer financial vehicle – like your savings account.

This holds true for all those people who invest to basically finance their retirement so that they can relax after a hectic work life in the comfort of substantial money. The number two reason is when the industry in which you have put in your money goes through some sort of turmoil, caused by internal or external, political or any other factor. You know that these factors will cause the stocks to drop never to rise again or the possibility of such positive development is very remote. The right time to sell your stocks during such situations would be when they are just starting to drop. This means that you have to constantly alert and keep vigil on the market dynamics.

The third reason to sell stocks is when the going is incredibly good. If your stock value is $100 and you find that it has risen to $200 per share the next week, you should immediately go for the kill and sell the shares. The current price of $200per share makes a neat 100% profit in the shortest possible time.

As a fresher in the world of stock selling, you would obviously like to consult your stock broker or your financial planner who has be in a better position to advise you and guide you in the matter of selling stocks so that you can make the right decisions at the right time.