In this article, we will talk about the right time to sell any shares you own, and how to know when you should give up your shares.
Sometimes deciding when to buy shares is easier than figuring out when to sell shares.
Therefore, the question "when do I give up the stock?"
It is the most difficult questions that some people ask in the stock market. There are simply several reasons that help the investor know the optimal time to sell, whether to take profits in a timely manner or to stop losses before they worsen dramatically.
1: Achieving the target price in the beginning
The process of buying shares includes a good analysis of what the share is worth as an attempt to grab it for less than its true value. After the purchase process, skilled investors set a target price or at least a price range in which they are considering selling the stock. Selling the stock is a good target when it doubles by 50%
2: When the reason for buying the stock is gone
What the investor needs in this case is to ask himself why did you buy this stock? For example, the reason for buying a company’s stock may be based on its possession of a competitive advantage in the sector in which it operates, or the company’s possession of strong fundamentals. Someone wants to lose, and someone may delude himself that the stock will rebound in the near future, even if its performance worsens, or a better investment opportunity appears for profit, so do not decide to sell. Com", after buying its shares for $47 in early 2000, he was forced to sell in April 2002 for less than $5 per share.
3: the emergence of a better investment opportunity
In the stock market there are always opportunities that cannot be missed. They are good stocks available at prices that may not be repeated, and if you do not have enough liquidity to capture them, you may find yourself having to liquidate part of your portfolio to obtain the stock that you see the prospects for growth strong.
However, most investors do not do this because they are emotionally attached to their holdings of shares, which leads them to hold them for long periods regardless of their performance, but some shares are holding on to as trying to win a football match in the Premier League with a group of old and elderly players who are no longer able to compete In late 2008, at the height of the global financial crisis, a number of investors rushed to liquidate a large part of their portfolios to seize the shares of banks and financial companies that were being sold at very cheap prices and below their book value, which enabled them later to achieve significant gains once the panic disappeared and most of the companies’ shares rebounded.
4: When the fundamentals deteriorate
Investors may sometimes need to sell shares when the company's fundamentals have changed for the worse. For example, if a company's quarterly earnings are steadily declining or performing poorly compared to the rest of the companies in the sector. While you own a stock that you plan to hold for many years, it is important to monitor the company's fundamentals by analyzing its financial statements and keeping track of its sales, revenue, and management performance.
If it turns out that the company is not operating as planned, it is necessary to determine whether the deterioration in the fundamentals of the stock is temporary or permanent. Since this is not an easy task, it may be better to sell and exit before the financial situation worsens, and then evaluate Whether the stock should be repurchased later.
5: When a competitor issues bad news
Often, problems affecting a particular sector can be highlighted when a leading company in that sector reports a profit loss. If you own a stock of a company in this sector, consider selling it unless you are absolutely confident that your stock will not be affected by sector problems.
Finally, I hope you will benefit from this article
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