Page 1127 - How to Make Money in Stocks Trilogy

Selling Checklist 113

Want to Invest Well? Learn How to Sell Well!

Knowing when to sell is one of the trickier—and most overlooked—aspects
of investing.
All too many folks jump into the market thinking only about what to buy,
without giving much thought to when to sell. But as IBD Executive Editor
Chris Gessel has said: “Investing without sell rules is like learning to
fly without learning how to land!”
Don’t think of selling as something negative. It’s an essential part of
investing that puts you in control of your money. Like the brakes on your
car, sell rules don’t just keep you out of an “accident.” They let you stop
and get out at your desired destination so you can cash in your profits at the
right time.
As we go through the Selling Checklist, you’ll see our approach comes
back again to the “big rocks”—the essential pillars of successful investing—
we’ve been discussing throughout this book:
• Only buy stocks in a market uptrend. Take defensive action as a down-
trend begins.
• Buy stocks being heavily bought by institutional investors. Avoid those
they’re heavily selling.

The sell rules we’ll cover are easy to follow—if you keep those all-too-
human emotions of fear, hope and greed on a tight leash.
I’ll be the first to admit, that’s not always easy to do. So before we go over
the specific rules in the Selling Checklist, let’s take a look at 8 selling
“secrets” that will keep you in the right frame of mind and help you take
decisive action when it’s time to lock in your profits or cut short any losses.

Check the Chart for Clues on When to Sell or Hold
Would you like an “early warning detection system” for your stocks? Learn to read
charts!
Once you understand a few common warning signs, you’ll know whether it’s time
to sit tight—or get out. We’ll cover chart-related items on the checklist in Chapter 6,
“Don’t Invest Blindly: Use Charts to See the Best Time to Buy and Sell.”