I want to know when to sell my stocks?

craigslist123 wrote: ↑ Hi,
I have read multiple articles about when to sell your stocks.
* Sell when it reaches gain % you had in mind
* Sell when the price is dropped 20%
* Sell when the price is high
* Buffet says should keep it forever

As you can see there are many variables...I will like to hear a couple of reasons why you guys will sell a stock. I think it would be useful for many people.
Thank you

Sell it if you have something "better" to do with the money.

The answer will be different for everyone. Someone might sell to go on a vacation

One might sell to rebalance.

Are you trading or investing?

If you still like the company and it has dropped 20% you should want to buy more of it not sell it. It's on sale ... if your favourite grocery store item goes on sale do you avoid it and return ones you already bought, or buy more and stock up?

ace604 wrote: ↑ If you still like the company and it has dropped 20% you should want to buy more of it not sell it. It's on sale ... if your favourite grocery store item goes on sale do you avoid it and return ones you already bought, or buy more and stock up?

I disagree with this comment. What if someone owns SEARS.

craigslist123 wrote: ↑ I disagree with this comment. What if someone owns SEARS.

i disagree with you. ace604 specifically mentioned if you still like the company

It depends on your original intent of purchasing the shares and what your plan was when you originally began investing. Whether you're holding long term, or for a quick flip, etc. is up to you and will determine your course of action

Million dollar question. I tend to speak very basic instead of getting technical when it comes to most investment questions. My take:

When you long a position it's because you have a positive view on a stock, when that view changes or as ace said, when you have something better (ideally a higher return) to do with the money then sell it. The tough part of the equation is how do you actually value a stock, there's no one right way and sometimes non quantifiable factors like pure emotion and speculation can really affect the market value of a stock. So for me it comes down to three things usually i) What is my view or ~expected return on this security ii) What is my risk tolerance / how much am I willing to lose? iii) What is my time horizon until I need to employ these funds for something else (retirement or significant purchase: vacation, car, house, school etc). What you hold and when you sell should reflect these to some degree. I also believe you should never chase your losses in hopes of one day breaking evening, so sometimes it is good to give yourself a hard threshold of when to sell like perhaps the 20% you suggested, this number is dependent on your risk of course; for some of my positions I'm willing to lose 100% because the investment in absolute terms is low.

ace604 wrote: ↑ If you still like the company and it has dropped 20% you should want to buy more of it not sell it. It's on sale ... if your favourite grocery store item goes on sale do you avoid it and return ones you already bought, or buy more and stock up?

craigslist123 wrote: ↑ I disagree with this comment. What if someone owns SEARS.

secol wrote: ↑ i disagree with you. ace604 specifically mentioned if you still like the company

This.

If you bought SEARS, *and* you still like it for some reason, then you should like it more when it is 20% cheaper.

craigslist123 wrote: ↑ Hi,
I have read multiple articles about when to sell your stocks.
* Sell when it reaches gain % you had in mind
* Sell when the price is dropped 20%
* Sell when the price is high
* Buffet says should keep it forever

As you can see there are many variables...I will like to hear a couple of reasons why you guys will sell a stock. I think it would be useful for many people.
Thank you

This feels like a troll question LOL.

ace604: I missed reading the "if you still like"
atang810: Why?

One size doesn't feet all. I personally never want to sell a stock that I invest on, because my goal is income replacement via dividend growth. But I will sell if the business no longer meet my goals and the reason that I chose when I decided to partner with. Another valid case to sell when investing is when a company is overvalued. Profits can be locked and cash can be deployed to other opportunities. However, this carries risks, since the new company might not perform as well as the former one.

When trading, several reasons can be used to sell, both from fundamentals perspective and from technical analysis perspective. My trading models either sell when ranking deteriorates or when technicals cross-over or to lock profit or when price doesn't climb during a certain period of time or when certain fundamentals metric deteriorate.

The best rule is to define the criteria to buy and sell, be investing or trading. It's a lot easier to make decisions with a defined plan than trying to separate emotions when price goes too high or too low.


Rod

Thank you all for your answers. You are the best!

When Rodbarc says to sell.

ace604 wrote: ↑ Sell it if you have something "better" to do with the money.

like this answer. everybody have finite resources and infinite opportunities. if I can do better by investing in another asset, I sell under performing and buy outperforming product.

Sell Bond, ETF. They are having a hard time.

Put at trailing stop loss order GTC - that's when you need to get out of a stock

Many people misquote Buffett and it's sad because they lose money by misunderstanding him.

Only hold stocks "forever" if the stocks are large companies with sound management, great cash flow/balance sheet and reasonable expectation of growth. You don't ever see Buffet buying risky assets like Jr. miners. Instead, he waits for great companies like Goldman Sachs are beaten-up and then he pounds on the opportunity.