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When to Sell Your Stocks? (Part 3)

If it’s negative news then people tend to sell on news. Trick here is to be fast because before you know it, the price has already plunged to irrational levels only to recover in the next few days as the market digests the actual impact of negative news. Selling during the plunge itself may force you to sell at very low prices which you might regret tomorrow.

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(Third of 3 parts. Here’s part 1, and part 2).

In this 3-part series, we outlined some triggers for you on when to sell your stocks (whether gain or loss). Caveat emptor. You alone manage your money, you alone know what’s your investment OHA, so at the end of the day, you’ll decide when to sell. Remember as well that fear of missing out (FOMO) is generally stronger than fear of loss, but if we are to be rational about it, we should in fact make not losing money our primary focus, instead of chasing gains.

 

Sell on news.

If it’s negative news then people tend to sell on news. Trick here is to be fast because before you know it, the price has already plunged to irrational levels only to recover in the next few days as the market digests the actual impact of negative news. Selling during the plunge itself may force you to sell at very low prices which you might regret tomorrow. Assess the news, will it impact the company in the long run, isolated to a small portion, etc.

Sell on news. Again.
Even if news is positive. We know that the market is forward looking so some traders have the view that the uptrend in a particular stock is in anticipation of a major positive event. Once such event is confirmed they believe that the good news has been priced in already, hence they sell. On the other hand though, those who are not so much in the know, only start buying once news is released. So which one are you? Personally, for me, it depends on the news.
 
Sell on season.
Do you believe in ghost month? For some this is an opportunity to sell since the general sentiment is bearish.  But more clear minds actually attack and are on buy mode in ghost month, presumably of course that the stocks are on bargain cheap prices already. Or when the market is bearish already, recession, global financial crisis, etc. There’s no easier reason to sell than when the bears have prevailed. Stay out for a while. Have a vacation. Then accumulate free cash bullets, ready once the bottom is confirmed.


Sell when you need the funds.
Hopefully this is the last reason why you’re selling. Ideally you set aside cash for your daily/monthly needs, plus emergency funds and just risk the money you can afford to lose. Otherwise you might be forced to sell at a loss. But heck we all know this is hard to do, the allure of missing out on gains in the market is just too hard to resist.

Your money, your call. We’ll just say I told you so.

These are just some sell indicators you might want to consider. Best of they are used in combination of one another. Adopt as you wish if these fit your trading plan.

 

Again, you may read part 1 here, then part 2 here.

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May we all have a richer life!
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About Geri (346 Articles)
Founder and main author. Husband, used-to-be-breadwinner, God-made multi-millionaire, employee, financial planner and adviser, investor, stocks trader, entrepreneur, agri-preneur, book author. Firm believer that all Pinoys deserve a richer life. Not a guru, but a forever student of the investments world, a work-in-progress.

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