Small Trades Journal

Here are guidelines to consider when selling a stock ¹:

• The stock is significantly overpriced relative to its original cost
• You have a better investment for your money
• You need the money within 3-5 years
• The reason you bought the stock is no longer valid, you’ve lost confidence in the company, or you no longer understand the company

Selling a stock above its purchase price is essential to earning a capital gain.  Remember that there is a capital gains tax to pay on the proceeds from the sale of the stock unless the stock is held in a tax-deferred brokerage account ¹.

I use a simple calculation to guide the sale of my stock above purchase price.  Here’s a link to that calculation.

Reference

1.  Identifying sell signals for a stock.  The Motley Fool.  David and Tom Gardner.  The Columbus Dispatch, page D4, Sunday, July 22, 2012.

This entry was posted on Sunday, July 22nd, 2012 at 3:16 pm and is filed under do-it-yourself investing, Personal finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.