Most people agonize over when to buy a stock, but here are some suggestions to consider when you’re trying to decide when to sell a stock.
Zero Tax Consequences. If you hold stock within a retirement fund and you find yourself in a period where you can realize your gains without impact on your taxes, consider selling.
To Recoup an Investment. If you’ve made money back on an investment, you may want to sell a portion of the stock to recoup your investment. That way you can continue to invest in that particular stock, but everything from that point will be a gain.
Negative Shifts. Are you seeing repeated negative news about an entire industry that you’re invested in? Are you hearing from professional prognosticators about how the economy is shifting away from that sector? If you feel that your investments are in a vulnerable place, you may want to sell them off to avoid long slow slides.
Giving Up. Known as the gambler’s fallacy, a long period without luck doesn’t mean that your fortunes are about to change. Similarly, don’t think that a stock that has declined or flat-lined for an extended period is going to get better just because. Free up your capital and move on . . . or you may have to sell even lower later on.
Realizing Good News. Has good new just hit your portfolio and one of your investments has jumped up? These spikes may be temporary, and if you think this is what is happening with your investment, consider selling to harvest your gains while prices are high.
When You Need Cash. Perhaps you’re building up for a particular investment, or you just see gloom and doom on the horizon. Building up your cash reserves is generally a good idea in those situations.
During Zombie Apocalypses. Finally, if you are going through a zombie apocalypse, consider selling in order to build a good set of defenses. True, investments in private defense organizations and paramilitary groups might skyrocket, but will you really be able to enjoy it if your family doesn’t survive the initial outbreak? Weigh the risk versus guaranteed security. Also, consider aluminum baseball bats, they tend to swing harder and can really take a zombie’s head off.
Your philosophy on when to sell should be just as disciplined and thought-out as your philosophy on when to buy. We can help you come up with a strategy, and we can even create flow-charts, if that’s what you need. Also, just note that we have limited hours during zombie apocalypses, check our website for updated hours (hours will differ between slow- and fast-zombie apocalypses).
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