When To Sell (Special Report)
When To Sell (Special Report)
When To Sell (Special Report)
How to Know
When to Sell
Your Stock
Vishal Khandelwal (Tribesman, Safal Niveshak)
www.safalniveshak.com
than what you had thought when you had bought the stock, it makes utmost senses to sell it. Also, while an investor must sell his stock if he realise that a mistake has been made, the losses from that sales must never cause self-disgust. And neither should these losses be passed over lightly. You need to review these losses as that you learn a lesson out of the same, and do not repeat the same mistake in the future. # 2 Reason to Sell When a stock does not qualify to be held anymore While this reason might sound similar to the first reason to sell a stock, it isnt. Instead, here we are talking about the good stocks in your portfolio. You must sell such stocks when, because of passage of time and due to fundamental changes in the companies, these stocks no longer qualify to be held anymore.
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That is the reason you must run your investment checklist on your stock portfolio after a certain interval, say six months or a year. If you realise that a companys business has changed for the worse, like on any of the following factors, you must sell its stock. 1. The company is facing increased competition and has thus lowered the prices of its products or services; The company is seeing a deterioration in its profit margins and/or cash flows; The management has made a wrong decision like entering an unrelated business that will could negatively impact the company in the future;
The stocks that you might decide to sell might still be good. But then the newly identified stock might be even better. Its like selling a stock where you expect annual average returns of 15% (which is good in absolute terms) to buy a stock where expected returns are around 20%. But when you are looking to switch to a better company, return must be just one of your criteria. The new company must also pass your investment checklist.
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There could be other reasons to sell a stock, but these are the most common and obvious ones. If you find any of your stocks to be facing any of these situations, it will always pay to get out of the same. # 3 Reason to Sell When a better opportunity is identified If you have made the right decisions while buying your stocks, this reason for selling stocks does not arise often. But in case you were to find a better opportunity in another stock than you find in any of your holdings, and you dont have additional funds to deploy, it is a good idea to sell some of your existing stocks to reinvest in that better opportunity.
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the confidence in their voice suggests that they are sure that their predictions will come true. But this is the case till the next quarter comes, and the earnings projections are revised, either up or down. And the same cycle of predictions begins. If the company has the potential to grow strongly that its earnings quadruple in another ten or twenty years, is it really of such great concern whether the stock is currently selling 30-35% overpriced? The stock has moved up sharply and that it cannot go up much further up. This reasoning seems right unless of course you are talking about an Infosys. Anyone who bought Infosyss stock in 1993 and sold it after it doubled or tripled, must be ruing now. This is because the stock has multiplied almost 3,500 times (yes, thats the right number!) since its listing. See, its difficult to predict which stocks will go up ten-fold or twenty-fold. So it is good to stick with good stocks as long as the story is intact. To repeat Fishers words, If the job has been correctly done when a common stock is purchased, the time to sell it is almost never.
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