A successful investor not only knows the best time to buy stocks but also when is the best time to sell a stock. According to the personal experience of numerous experts, the second is in many cases more difficult than the first. To help you with this difficult task, this post will explain a few additional hints that may help you determine when to sell stocks. The importance of knowing when to sell stocks is just as important as choosing the stock itself.
The value of investing in stocks is, on one hand, a smart move because companies pay a lower price than they’re worth. In fact, people pay a price lower than its intrinsic value but that value can rise and be very profitable. But also, on the other hand, is may be smart to sell stocks that, for different reasons, are no longer suitable components of your investment portfolio. Many people tend to look for shares of companies that may be around for decades. However, it is very difficult to find companies that people can keep in their portfolio for decades. In many cases, folks will have to sell their stocks for various reasons. When buying or selling stocks, look at the:
- Quote above its intrinsic value
- Existence of better investment opportunities
- Adjustments to the investment portfolio
- Increased risk in the company
- Personal needs
Often, with the passage of time, the potential of many investments that have been profitable is eventually diluted because of the revaluation of companies in the stock market. Stock holders may be depressed for some time, but they usually end up regaining their sanity and getting back the money they put in, and even more. If a person is to make money, they need to buy low and sell high. Although this is the most common reason to sell a stock, it is not the only one. There are other less usual reasons but people also have to take into account to determine if they want to keep the stock to see if things change. Sometimes selling a company stock that is listed below its intrinsic value may be a good idea. This happens when there are investments that offer investors greater potential.