Just as there are no hard-and-fast rules as to when to buy a stock, there are no hard-and-fast rules as to when to sell. But investors typically spend a lot more of their time researching their stock purchases than they spend considering their selling decisions. Unfortunately, selling decisions are often made in the heat of the moment, after a stock has already taken a beating in the market.
The best way to know when to sell a stock is to know why you own it in the first place. Did you love the company's fundamentals? Then you should know when they are changing for the worse. Was the company the industry leader? Then you should keep a close eye on the competition, and know when it is catching up to your company. Did you love the industry? Then you need to watch for an industry downturn. Did you buy the stock because it was undervalued? Then you should have a firm idea of what you think fair value is.
Don't Sell Based on Price Alone >>