Course 303:
When to Sell an Investment
In this course
1 Introduction
2 How Selling Can Hurt
3 Bad Reasons To Sell
4 Good Reasons To Sell

 

When the Dow Jones Industrial Average plunges 500 points in a single day, the knee-jerk reaction is to get out--fast. But just as making an investment occurs only after of an extended period of goal setting and research, selling is also best done only after cool deliberation. Selling is not best done in the heat of crumbling markets.

Develop your selling discipline. That means establishing a set of selling parameters for your investments.

Selling according to pre-established rules forces you to have a good reason for getting out of an investment--a reason that's based on your personal investment philosophy and the investment selection criteria you laid out in your Investment Policy Statement.

If you haven't developed your monitoring procedures or created your Investment Policy Statement, review Portfolio 108 and download Morningstar's Investment Policy Statement Worksheet at http://news.morningstar.com/pdfs/Investment_Policy_Worksheet.pdf. (Note: The worksheet is available as a PDF file. You will need Adobe® Acrobat® Reader to view and print it.)

This course will cover how selling can hurt a portfolio's performances, some bad reasons to sell an investment, and some good causes for pulling the trigger.

Next: How Selling Can Hurt >>

 
Search     
Print Lesson  | Feedback
Del.icio.us Del.icio.us | Digg! digg it
  Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
© Copyright 2010 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.