That stock you purchased a few years back seemed like your ticket to early retirement, but now it’s underperforming and you’re wondering whether it’s worth holding onto. It’s a tough decision to make, and you want to know you’re making a choice you won’t regret down the road.
When is the best time to sell stocks? Find out in this guide from our prop trading firm in Chicago.
Signs It’s Time To Ditch Your Stocks and Move on to Greener Pastures
Maybe that mining stock you’ve been holding onto has exploded in price after the company (literally) struck gold, or that tech stock you invested in has lost its value and doesn’t look like it will recover. Now you’re asking the million-dollar question: “Should I sell?”
Maybe. Here are the top five signs that it might be time to get rid of your stocks.
1. The Stock’s Prospects No Longer Look So Hot
When you first purchased your stock, its future seemed bright. Perhaps the company brought in new leadership that promised big profits. But a few years down the line, that leadership has bailed, and the company’s profits (and its stocks) are beginning to sink. Or maybe another company has stolen too much of this one’s market share and it doesn’t look like the stock will recover.
If it doesn’t seem like the stock will ever increase in value again, it may be worth selling it. You only have so much capital to invest, after all, and it isn’t worth holding onto a stock that won’t perform when there are so many better options out there.
2. You Need Fast Access to Capital
Has life thrown you a curveball that you weren’t prepared to catch? For example, you’ve lost your job due to layoffs, and the savings in your bank account are rapidly dwindling. Or maybe you had an accident that put you in the hospital for over a month and now you’re getting testy calls from debt collectors.
If you’ve built up a good amount of capital with your stocks and need that cash ASAP, this could be the best time to sell stocks. However, if you have other options for gaining access to capital (such as a personal loan), you might prefer to go that route instead.
3. You’d Like To Buy a Different Stock
Investment capital isn’t unlimited, and there’s only so much to go around. If you’d like to purchase a different stock, you might have to sell one of your existing stocks to get the capital for it.
Before you begin trading stocks, it’s smart to consider economic indicators and earnings reports from companies. Doing this will help you decide if you’d be better off holding onto your current stock or swapping it out for a more promising stock instead.
4. The Stock Has Reached Your Target Sell Price
When you bought your stocks, you may have set stop-loss orders, which instruct the trading platform to automatically sell the stock once it reaches a certain price. This system is designed to prevent you from taking too much of a loss, and as an added benefit, it takes the emotion out of paying attention to price peaks and valleys. Even if you didn’t set up a stop-loss order, it’s a good idea to consider at what point you’d be willing to sell the stock.
So, when is the best time to sell stocks? Some experts believe that it’s best to sell a stock when its value drops to 7%-8% less than you paid for it. If this happens, it usually indicates that something’s wrong with the company, the industry, market trends, or all of these. There’s a strong likelihood that the stock’s value will drop even further. You’ll be glad you sold if that stock’s price plummets by 25% or more.
5. Market Conditions Are Keeping You Up at Night
It’s usually not a good idea to sell stocks simply because market conditions are looking a little stormy. Far too many people panic when interest rates change or there’s a geopolitical event that shakes up the market. Conditions like these aren’t forever, and the winds could shift back in your favor eventually.
But if you’re stressed about how much of your net worth is caught up in the stock market, it might be time to sell. For example, maybe you’re worried about what would happen to your retirement fund if the stock market were to crash. In this case, it may be worth selling at least some of your stocks and putting the capital into less risky investments.
The Many Advantages of Working With Black Eagle Financial Group
Need expert guidance on when to buy and sell stocks? Black Eagle Financial Group is here to help. When you work with us, you’ll enjoy great perks like these:
- Tailored pricing: Many firms only offer a one-size-fits-all pricing structure, but at Black Eagle Financial Group, we know that no two traders are alike. That’s why we offer custom pricing and tiered structures that reward you as your rates increase.
- Capital security: Our firm takes care of your capital as if it were our own. We offer an escrow trading account that keeps your money safe and ensures it’s ready when you need it.
- Trading platforms: We’re proud to offer Sterling Trader Pro, one of the most popular and cost-effective trading platforms on the market. And if you’d like to use a different platform, feel free to let us know.
- Custom routing: Black Eagle Financial Group offers custom routing options linked to a variety of execution brokers, giving clients access to quick liquidity.
- Mentorship program: Our mentorship program pairs seasoned investors with beginners interested in learning about the market. Are you an experienced pro who would like to make some extra cash on the side? Let us know and we’ll hook you up.
- NIGHTVISION: Our proprietary tool makes trading a breeze. You’ll never be left in the dark again when you have NIGHTVISION. This tool enables you to see where traders are getting their flows filled and which routes you can use to access liquidity.
- Custom reports: Help your traders keep tabs on investments with our customized reports. Our reports make it easy to track distributions, allocations, profit-taking, and other accounting items. We also offer white-label custom reporting.
Reliable Investing Support for Traders and Managers
When you work with Black Eagle Financial Group, you’ll enjoy world-class support to help you take your trades to the next level. We provide our clients with proprietary tools, excellent routing options, and an advanced trading platform to help them maintain their market edge.
Want to learn about stock trading rules or get more answers to the question “When is the best time to sell stocks?” Call (833) 253-2453 today.