InvestorQ : What are some of the key signals to sell a stock?
Priyanka Jain made post

What are some of the key signals to sell a stock?

Answer
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Jignesh Gupta answered.
2 years ago


The funny part about stock markets is that there is a lot of discussion about buying stocks and how to identify stocks but it is very little about selling stocks. In fact, it is only when you sell a stock that you actually realize profits only when you sell the stock that you are holding. That is when your MTM profits or your book profits get converted into actual money. That is why identifying and knowing the signals of selling stocks is very important. S the old saying in the stock market goes, “Profit is what is booked; all else is just book profits”. That is where the role of selling a stock comes in handy.
In the stock markets, you make money only by selling. Notional profits are notional, period! The best stock market buy decisions are pointless if you are not able to get out of the stock at the right time. That brings us to the fundamental question; when to sell a stock in the market? There could be different reasons for selling a stock.
Your target price may have been achieved or there may be better opportunities available in the markets. Secondly, there may be structural shifts in the company in terms of performance which may warrant a selling of the stock. It is also possible that the original purpose for which you bought the stock has been achieved. More importantly, you may be reconsidering equity as an asset class. Any of these can be a trigger for selling out of the stock.