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When to Sell your Stock

So, when you should sell your stock?  Your stock sell strategy is just as important as your stock buy strategy. After all, you will not make a profit until you sell your stock.

It seems everyone has their preferred way to buy a stock. Every investment newsletter lists stocks to buy now; your broker has her favorite "strong buy" list; your friend at work has his "can't miss" stock to buy now; heck, even the taxi driver has their favorite stock idea. 

Two things can happen to a stock. It can go up and you will have an unrealized gain. Or it can go down and you will have an unrealized loss.

Let's assume you are each right with your picks and your stock has gone up. Now what. Do you keep holding, hoping it will continue to go up? Do you sell it all, or maybe sell some of it? 

On the other hand, not every stock you buy will perform as expected. What do you do when the price falls? Hold it hoping for a rebound? Do you sell it? 

These are all good questions. To bad none of the people who give you the stock tip told you when to sell. Up until now any gains or losses you have are unrealized and exist only on paper. Only through the act of selling will you actually realize any profits or losses from your investments and trades. Now, if you only knew what to sell and when to sell it.

There are three important factors to consider when developing your stock exit strategy:

After considering these three factors you end up with five reasons to sell your stock: 

Stock sell strategies are an important part of any investors tool kit. Knowing when to sell your shares of stock is an important technique to employ.