Page 379 - How to Make Money in Stocks Trilogy

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• C HAP T E R •

When to Sell and Take Your

Worthwhile Profits

This is one of the most vital chapters in this book, covering an essential subject
few investors handle right. So study it carefully. Common stock is just like
any merchandise. You, as the merchant, must sell your stock if you’re to
realize a profit, and the best way to sell a stock is while it’s on the way up, still
advancing and looking strong to everyone.
This is completely contrary to human nature. It means selling when your
stock is strong, up a lot in price, and looks like it will make even more profit
for you. But when you sell like this, you won’t be caught in heartrending
20% to 40% corrections that can hit market leaders and put downside pres-
sure on your portfolio. You’ll never sell at the top, so don’t kick yourself
when some stocks go higher after you sell.
If you don’t sell early, you’ll be late. Your object is to make and
take significant gains and not get excited, optimistic, greedy, or
emotionally carried away as your stock’s advance gets stronger.
Keep in mind the old saying: “Bulls make money and bears make money,
but pigs get slaughtered.”
The basic objective of your account should be to show a net profit. To
retain worthwhile profits, you must sell and take them. The key is knowing
when to do just that.
Bernard Baruch, the financier who built a fortune in the stock market,
said, “Repeatedly, I have sold a stock while it was still rising—and that has
been one reason why I have held on to my fortune. Many a time, I might

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