Wondering When To Sell A Stock? Use This 4-Minute Checklist

 As an investor who loves to simply buy, hold and collect returns from my investments, I usually hate the idea of having to sell one of the stocks in my portfolio.
 

After all, I'd like to think that I invested in good companies that didn't ever need to be sold.
But sometimes, even stocks that have delivered years of solid returns lose their stride. Other times, a good company may become mediocre. And then there are times when you discover you chose a bomb of a stock instead of a treasure.

Meanwhile, dozens of other potentially great stocks await that could make your money grow much faster -- so why not just dump the stock that's not performing?

Because selling for the wrong reasons can be a costly mistake. It's much easier to buy a stock than to know when you should sell one.

Many investors are reactive and sell at the same time everyone else does -- when they're fearful. But your emotions aren't the best guide for making critical financial decisions. Look at how investors have reacted to stock market downturns in the past five years:

As you can see, investors often react and sell after it's too late. Other times, they hold on and keep losing money on a soured stock. That's why it's important to be proactive, watching the finances and moves of the company behind the stock you own, so then you can see the warning signs before your stock falls (or in some cases, plunges further than it has already).

While it's generally a good idea for most investors to sell sparingly, here are some emotion-free signs that it's finally time to sell a stock: (more)

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