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There is plenty of bad news plaguing the markets these days. But bad news about an individual stock can crop up any time, in good markets or bad. It’s always upsetting, but it’s not necessarily a calamity.
When you hear bad news about a stock you own, it’s easy to react impulsively and sell. But all investments come under a bad news cloud from time to time. If you always sell on bad news, you’ll pay lots of brokerage commissions, but you’ll never make money for yourself.
To decide when to sell on bad news, you need to develop perspective. You need to be able to tell if the company has hit a bump in the road or gone off a cliff. Here’s our stock investing advice on the good reasons to sell on bad news, and the bad reasons.
Good reasons to sell:
Bad reasons to sell:
Knowing when to sell is the hardest part of investing. Our stock investing advice is that you’ll make your investment life easier and more profitable if you mainly choose high-quality investments with honest managers and established profit-making, reputable businesses. You can make money by holding these stocks and collecting dividends over long periods, even if you sit through lengthy price setbacks.
If you’d like me to personally apply my time-tested investment approach to your portfolio, you should consider becoming a client of my Successful Investor Wealth Management service. Click here to learn more.2 Comments
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