How do you know when its time to sell your stocks?

I know it's not the best time to ask!....LOL

I have shares in a prominent company, which I feel is very resilient. However, with the state the economy is in I am a bit concerned.

Some insight would be appreciated.

Thanks.

Tell us the stock. Why does it have to be a secret?

If by saying "prominent" you really are saying its a great company, then it is only a good time to sell when it becomes over priced or you find a better deal.

There was a time, when economys were growing, when wealth was being shared by the securities, that you could count on stocks making you money, almost no matter what.

I think today things have changed in the dynamics of the stock market. There is an ever pervasive Hedge Fund presence and a realization that, in many cases, the value of a company is not tied to a stock price, which is what an investor in stock likes to see go up or appreciate. We have an influx of clever large worldwide electronic investors in the market nowadays, who manipulate the masses into buying into a stock with a "long term view", and when you get in, the larger shareholders start pulling out.

When they do, they have a variety of vehicles to make money off of their pulling out action, shorting and puts(a huge money maker on the way down), among those methods. These practices have become the norm of today. The long term traders are becoming the bait for the short term speculators, who can also maniupulate the price of shares quite handily under the radar.

This is combined with excuses in the market. Lower wages, depressed economy of scale, subprime lending gone astray(something that must have been seen a long time ago coming), since many hedge funds have made billions off of that failure.

Worldwide commodity hedge funds have bought up commodities and bid them up to super values. Many stocks over the past 5 years have doubled every year! This all had to come to a stop sooner or later. All this growth price was on the back of subprime lending, lending done to people who could not afford to pay so that mortgage companies could take in money and invest in stocks to drive up their prices and pull out before you had a chance to and keep their profits from that.

It is all because our world of information has changed and response time to invest or divest has changed. The old long term player is now a dinosaur in the investment market. SEC has changed rules and allowed many more tricks to take place too.

I expect the market will fall for quite some time and that large companies don't need your money to survive, who have cash in their accounts will do ok, hang in there, dropping less. But the smaller companies could be in trouble.

The media is there to keep you entertained about all of this. Without belonging to a click or guessing right, you won't know when it is over until it is over. It might be a while.

There is an interesting 'rule of thumb' in this, and that is to try as much as possible to forget what you paid for the stock. You look at its present situation of the stock, and where you guestimate it will go, and decide if you would purchase it NOW. If you would, keep it, if not, consider selling.

This is an effective way to free yourself of the emotional aversion of losing, and the fear of not winning 'enough'.

I'm not bullish at the moment. I think the market is going to go lower and drag most everything with it.

I think sell your stocks, unfortunately there isn't much growth in the US economy this year.

You should have a set of guidelines you follow to help you determine this, like after it reaches a certain share price, or falls a certain amount, or you've held it for a certain time period. If you still like the stock for the same reasons you bought it (i.e. it hasn't just declared bankruptcy), then nothing's really changed other then the fact that it's likely more attractive now than it was when you bought it (assuming it's gone down in price since you bought it like all of the other stocks out there). Now, if you're interested in trying to time the market, try my website:
http://www.geocities.com/kenandkindi
I have several links to free market timing websites. Good luck.

Buy on mystery, sell on history is the saying. If your company is doing well, you need to find a company you think will do better to justify the sale. Consider watching for a day when your company is trading higher than "normal" and selling 1/3 or half or whatever of your holdings to put into another company. (provided the transaction cost is low)

When the stock's price reaches your target OR when you lost so much money, you don't want to lose any more in that trade.

Every trader should: "Plan the trade AND trade the plan." Before making any investment the potential investment should be researched and a price should be established for getting in, getting to a target then getting out and moving on to another trade.
OR
getting in, when the price falls to a certain price then getting out and moving on to another trade.

"Trees don't grow to Heaven - neither do stocks, mutual funds, bonds, options, commodities, currencies or any other investment."

No one can tell anyone else what that should be. Usually its expressed in percentages/
EXAMPLE: BCD is currently selling for $25/share. You do ALL the appropriate research. It meets your trading rules.

You decide to enter the trade at $25.26 [an increase of about 1%]

You decide to stay in the trade until the stock reaches $27.52 [a 10% profit]

IF the trade goes against you, you decide to exit the trade at $25.29 [a loss of 8%]

If the stock doesn't do anything for a period of "X" trading days, you decide you had enough and you'll get out.

There's more to trading than the example. I just gave you a very brief idea.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

I'll help you make up your own mind.

Right now, everyone is talking recession and "bear" market, right?

Take a look at the "stock" charts for the last recession (U.S.) 2001-2003:

http://www.financialsense.com/editorials/griess/2004/0727.html

Note the timeframe given at the bottom of each chart. Note the "peaks" and bottoms as they occur throughout the charts. See how much time passes between each peak or valley, approximately.

Now take a look at a chart of the Dow or S&P 500, going back one or two years. You may do this on finance.yahoo.com. Take a look at the timeframe around October 2007. This is the last major "peak", in fact it was the highest the stock market has ever been.

Now try to visualize what's happening now is similar to what happened six years ago. This should give you an idea of what to look for, when you consider selling (or buying) stocks.

in a BEAR market, an appropriate time to SELL stocks, is when there is a minor retracement against the major trend. In other words, when there is a relative PEAK such as what you see in the charts. In the charts, there are several of them in the 2001-2003 recession. Therefore, it is reasonable to assume that there will be several during this bear market.

Right now is a VALLEY, not a peak, so not a good time to sell.

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.054
Copyright (c) 2011 Financial Crisis Monday, May 28, 2012 - Terms of use - Privacy Policy