Thursday, October 11, 2007

Knowing When to Sell Your Stock

Knowing when to sell your stock is not as easy as deciding when to buy stock. One of the first questions that you should ask yourself when considering selling your stock is, can the money that I have invested in the stock be more valuable somewhere else? To evaluate whether the answer to this question is yes or no you will need to decide where else the money may be used. For example, you may have credit card debt that is draining your monthly budget. To evaluate if your invested money would serve you better by paying off your credit card debt you will first need to determine how likely it is that your stock will increase in value. If your stock is projected to increase dramatically in the next year then you may want to keep your money in the stock market. However, if the stock is not moving, or if it has been slowly losing ground, then selling the stock to pay off your high interest credit cards is probably a good option.

While most investors will base their decisions to sell their stocks on its performance or on a need to liquefy their assets, others base their decisions to sell on factors that are unique to the type of investors that they are. Day traders, for example, are more willing to sell their stock with small moves in the value of the stock then short term or long term investors are. If you dont know when you should sell your stock you should consult with your investment professional.

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