When should you sell a stock? (4 Reasons to SELL!) | Summary and Q&A

TL;DR

Knowing when to sell a stock is crucial to avoid costly mistakes and maximize returns.

Key Insights

• 🎟️ Selling a stock too early can result in missed opportunities for significant gains.
• 💱 Changing the investment thesis and accounting irregularities are valid reasons to consider selling a stock.
• 🧑‍🏭 Emotional factors and the need to rebalance your portfolio can influence selling decisions.
• 🚕 Tax reasons, such as tax loss harvesting, can sometimes play a role in selling stocks.
• 🔬 Keeping an investing journal can help identify patterns and improve decision-making when selling stocks.

Transcript

when should you sell a stock let's talk through all the cases when we think it's okay to cut ways with the stock my name is brian feraldi and my name is brian stovel brian we have talked a lot on our channel about the way you should buy a stock the way that you should vet a stock but we haven't yet touched upon when you should sell a stock it's a r... Read More

Questions & Answers

Q: What are some common mistakes investors make when selling stocks?

Many investors sell stocks too early, missing out on potential gains. It's important to be patient and not let short-term performance or market trends dictate selling decisions.

Q: When does your thesis change and when should you consider selling a stock?

Your thesis changes when the fundamental reasons for investing in a stock are no longer valid. This could be due to a company failing to meet expectations or unexpected developments in the industry.

Q: Are there emotional reasons to sell a stock?

Yes, emotional reasons can include losing sleep over investments, losing interest in a business, or needing to rebalance your portfolio. It's important to be self-aware and recognize when emotions are clouding investment decisions.

Q: Are there tax-related reasons to sell a stock?

In some cases, selling a stock for tax loss harvesting or re-upping your cost basis can have benefits. However, it's recommended to consult with a tax professional before making any decisions.

Summary & Key Takeaways

• Selling a stock can be more challenging than buying one, and many investors make mistakes by selling too early or for the wrong reasons.

• Holding onto winners and being patient can lead to significant gains in the stock market.

• There are four broad times when selling a stock may make sense: when your thesis changes, due to emotional reasons, for tax purposes, and to realign your priorities.