I can’t sell a stock because….
Sometimes the best offense is a great defense. Now that you’ve learned the basic rules of buying stocks, our emphasis will switch to Learning when to sell my stocks. In sports, a team that is all offense and no defense seldom wins the championship. In the stock market, you absolutely can’t win either unless you have a
strong predetermined defense to protect yourself against large losses. You must Learning When to Sell . This may surprise you, but if you invest in stocks, you are going to make a never-ending number of mistakes in your selection and timing of purchases.
These poor decisions will lead to losses, some of which can become quite painful. No matter how smart you may think you are or how good you believe your information or analysis is, you simply are not going to be right all of the time. In fact, you will probably be right only half the time!
Learning When to Sell
Have you ever muttered the words, “I can’t sell a stock because I don’t want to take a loss,” you assume that what you want has some bearing on the situation. Yet the stock does not know who you are, and it doesn’t care what you hope or want. Furthermore, you may believe that if you sell the stock you will be taking
the loss, but selling doesn’t give you the loss; you already have it!
When you think about selling a stock, you probably will look at your average costs to see what price you paid for the stock, won’t you? If you have a profit, you may sell; if you have a loss, you will wait rather than take the loss. After all, you didn’t invest in the market to lose money.
If you think a loss is not incurred until you sell the stock, you may be kidding yourself. The larger the paper loss, the more real it will become. Learning When to Sell.