Three Reasons to Get Out of the Stock Market
If you’re trading mutual funds, one of the most important things you can learn is that there are only three viable reasons to sell a stock. The number one is that you have attained your financial goals. Once you have, you may want to sell your stocks and place your money in financial vehicles with less risk, like a savings account or CD. This is common for people who have invested solely to finance their retirement.
The number two reason to sell your stock is if major changes hit the business that make the stock value drop, and you don’t think the value will ever rise again. Obviously, you would want to sell the stock before the value drops.
The third reason is if the value of the stock spikes. If it is valued at $120 per share today, but rises to $200 next week, it’s a great time to sell, especially if the common expectation is that the value will drop back down to $120 per share any time soon.
