Know when to sell
Deciding when to buy a stock is often easier than determining when to sell. As you're reviewing your portfolio at year-end, consider these situations that may indicate the right time to sell.
When there are no tax consequences. If you hold stock in a retirement fund, you may want to reap gains with no tax impact.
To take money off the table. If a stock has had a nice run, you could sell a portion to recoup part of your investment. You can continue to invest in the stock but with locked-in gains.
A shift in fundamentals. Consider selling if the economy changes or an entire industry becomes vulnerable due to negative news.
When you've given up on a stock. If a stock has been declining or flat-lining for an extended period, selling low now can save you from having to sell even lower later on.
To take a contrarian position. If the market has gotten frothy and all the news is optimistic, choosing to harvest your gains could be a wise move.
When cash becomes attractive. A gloomy economic outlook could be reason to increase your cash reserves.
Having a disciplined selling strategy means giving as much thought to the sale of a stock as to the purchase. Contact us. We're here to help.