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Value Investment and Mindset

When to Sell Your Shares after Investment 💰

Till now, in this series, we have focused on investment, but at some point, you decide to sell your share. Which, how, and when are the questions in mind with the future perspective of “what if?”

Let’s see when you are ready to sell out your shares to get an accurate profit.

Value investing is long-term investing, and you shouldn’t be selling without any reason. So here are the 3 reasons to sell your shares as a value investor:

Reason 1:

The strong business fundamentals no longer exist.

This is why we need to keep track of the companies in which we have invested.

Sell only when it is found that the economic characteristics of the business have changed in a major way.
Revenue or a certain matrix is not reaching the benchmark or expectation. Not fundamentally change. E.g., Meta (formerly Facebook) data security and privacy penalty.

Any minor short-term event that affects the matrix is acceptable, and we should give it time and see if the company can recover it.

Focus on the fundamentals of business with a long-term perspective.

Reason 2:

You found a better investment opportunity.

Let’s suppose company A has a weak system for working and gaining profit and company B has a better and stronger system (again based on research), then you can sell and move ahead with company B.

A similar approach can be used to advance your portfolio.

Example: If you have a portfolio with 10 companies invested and one of them has a weak system, just replace it with another option with a stronger system for a better portfolio report.

Reason 3:

When a single holding gets too large,.

No one wants to have a stock that makes up a large portion of their portfolio.
The larger the holding, the higher the risk.

To balance the percentage and minimize the risk, sell it.

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Last Updated: Sep 29, 2024

Tags: #stocks #sellshare #investment #finance #market #stockmarket #sellingshares #financemarket #buyshares #selling #sell #investing #money Category: Finance & Investment Learning Lifestyle