Course 504: When to Sell a Stock
When You Should Sell Based on Price
In this course
1 Introduction
2 Don't Sell Based on Price Alone
3 Know Why You Own a Stock
4 When You Should Sell Based on Price

Investors don't always buy a stock because they love the long-term story. Often, they will pick up a stock with just average fundamentals but that is clearly undervalued. If you buy a stock not because you love the company, but because its stock is cheap, then you should keep a much closer eye on valuation. Unfortunately, no hard-and-fast rules exist on when a stock becomes too expensive. That's why many investors fall back on simple rule-of-thumb cutoffs, such as P/E or PEG ratios. While this strategy can sometimes cause investors to miss out on a great run, firm cutoffs can force investors to be more disciplined--and to spend time examining investments that may have better future prospects.

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