When To Sell A Stock

It’s time to sell a stock when:

1. It reaches its target price—however, be sure to adjust the target price as company fundamentals evolve.

2. It makes you an offer you can’t refuse—such as a sudden price rise on news that may or may not pan out.

3. You realize you made a mistake—even diligent analysis can turn out to be wrong.

4. You find a better relative value elsewhere— a stock trading at a smaller percentage of estimated value provides a better margin of safety than a stock you own that has already risen and is close to its estimated worth.