Be a better investor: knowing when to sell

Timing is crucial to successful investment – and while it can be useful to follow your heart, don’t let it rule your head

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(Image credit: AFP/Getty Images)

As an investor, at some point in your investment career, you’ll be faced with one tricky dilemma. When, exactly, do you
cut your losses? The fact is that selling a stock is much more difficult than buying one – especially a loser. Whether it’s pride or hope, there are plenty of psychological obstacles in your path. So to avoid being undone by your own emotions in the heat of the moment, you need to have a dedicated action plan in place, preferably from the minute you first invest in a company.

So how do you go about it? Firstly, you need to take control of your portfolio. What do I mean by that? Well, like most investors,
you probably use online valuation tools to monitor your portfolio. That’s all well and good. But these valuation statements don’t have anything like all the information you need to monitor your investment – not least the reasons you bought the stock in the first place, and any thoughts you had on when you might sell.

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