Dear FutureMoneyTrends.com Member,
FutureMoneyTrends.com strongly recommends trailing stops on ALL of your positions. Real trailing stops; not just mental ones…It’s important to LOCK in those profits and limit your losses. We even recommend tightening up your stops when stocks have large runs. When it comes to selling without emotion, here are the top 10 reasons to sell a stock:
- Story changes – you bought for one reason and things don’t pan out. You asked a questioned and it was answered – perhaps not to your liking – sell it.
- Stock falls to or below your stop-loss.
- Shares dramatically (30%+) rise for no reason, with no news.
- Major media outlets profile it or, worse, call it the “investment of the decade.”
- On day trades, if a stock sees massive volume and doesn’t go up…sell it!
- Your risk tolerance changes. Loss of job, change in income, or death in family. Sometimes you just need to free cash up and there is nothing wrong with that.
- New opportunity. There is nothing wrong with selling a good or bad investment in order to enter a new one.
- Dividend cut or eliminated – this is a sign of financial difficulties or a change in management that doesn’t respect the rightful owner of profits. Either way, sell it.
- Lock in gains if a stock has risen so much it becomes greater than 10% of your holdings. Taking some off the table can reduce your risk in the future.
- You learned about the stock from a hard mailer. Mailers are sure sign of a massive marketing campaign. Though we encourage companies to market and expand their shareholder base, hard-mail campaigns are usually paid for by 3rd-party shareholders and not the companies themselves, which means whoever paid for the mailer you are reading is selling stock!
In next week’s Weekly Wealth Digest, we will cover reasons NOT to sell.
Have a prosperous week!