How to know when to sell a stock

More and more people have started buying and selling stocks during the pandemic. Lockdowns have provided the time for many to get their money working harder than it could in a standard savings account.

Buying shares in companies listed on a stock exchange can be fun and rewarding. But if you want to invest in the stock market, be prepared to invest time as well as money in your quest for healthy returns.

Deciding when to sell your stocks is as important as it is when buying them to ensure you bank the best profit you can.

Good reasons to sell stock
There are no concrete rules on when to sell shares. But there are a number of indicators that should trigger the need for a review of your investment portfolio.

We explore those indicators and why they might suggest it’s a good time to sell.

How to know when to sell a stock
Sell when the share price reaches your target value
If a stock you hold has achieved your objectives – that is, reached a target price that you have set – it could be time to sell and reinvest the proceeds somewhere else.

This may take some resilience if it looks like the stock is still going up.

When long term problems arise with the company
Most companies will have their ups and downs, and short-term problems can often be overlooked.

Look at hospitality and travel companies, for example. They are fundamentally well-run, and poised to exploit economic recovery after the pandemic. But they have suffered during the lockdowns.

However, if long-term issues arise – perhaps demand for a certain type of product looks doomed to keep waning – then it may be a good time to assess your situation and consider selling.

Source : The Times