When to Sell
and Take Your Profit
Common stock is just like merchandise that is bought and sold for a
profit. You, as the merchant, must sell your merchandise in order to
realize a profit. It is best to learn to sell on the way up while your stock
is still advancing and looks strong to everyone else. By doing this, you
will avoid getting caught in the 20% to 40% corrections which occur
periodically in market leaders and cause great downside portfolio
volatility.
It is far better to sell early. If you are not early, you will be late; you'll
never sell at the exact top, so stop kicking yourself when a stock goes
higher after you sell. The object is to make and take worthwhile gains
and not get excited, optimistic, or greedy as a stock's price advance gets
stronger! The old saying is, "Bulls make money and bears make money,
but pigs don't."
Bernard Baruch, the financier who built a fortune in the stock market,
said, "Repeatedly...I have sold a stock while it still was rising—and
that has been one reason why I have held onto my fortune. Many a
time, I might have made a good deal more by holding a stock, but I
would also have been caught in the fall when the price of the stock collapsed.