When to Sell Stocks
The answer is never.
All jokes aside, it really depends on what type of investor you are and the goals that you have. Let me break it down for you into two main styles.
Long Term Investor (I don’t need to use my money soon and would like to save for my future house, car, wedding, etc.)
If you want to invest in the long term, then you only sell stocks when you actually need to use the money. This is also beneficial because you will only pay long term capital gains tax on your stocks sold vs. the more expensive and costly short term capital gains tax (the capital gains tax is taxes you pay on any profit you make from stocks). For most investors who are new to the market, this should be your investing mindset and has proven to have reliable, safe returns.
2. Short Term Trader (I want to actively manage my funds and find opportunities in the market on a short term basis.)
Most of you have heard of huge day trading gains, and traders who quit their day job in order to trade full time. Hate to break it to you, but most day traders actually lose money overall and the odds are greatly stacked against you. However, if you do wish to actively trade, start small and have a strategy in mind. Know specific strategies like setting a stop loss on a short term trade, as well as being disciplined in taking profits.
Overall, in terms of wondering when to sell a stock, think about it this way - will my money grow faster if I invest it into a different stock? Have the same points and values when I first bought the stock changed? Most reputable stocks go through ups and downs, but eventually will keep going higher in the long run. This is why this old age adage still stands true - time in the market, beats timing the market.
