How do you identify a point to sell a stock and move on?
04 April 2023
Question by Anonymous
How do you identify a point to sell a stock and move on? What metrics would you use to determine this?
Answered by Boring Money
As quoted in our 'Money Clinic with Bestinvest' webinar:
This is a tricky one. There is a whole school of thought called technical analysis on this. With all sorts of lines and patterns on graphs. A common trick people use is to set a ‘stop loss’. This is a level or a price you agree with yourself when you buy the share – for example, if it falls to £5 a share, I’m selling. You can even automate this with some investment platforms. It's a good way of being strict and removing emotion from things.
Another trick is to set a point at which you sell some of your holdings. If you have something speculative for example and it doubles, I always think you consider selling half at that stage so at least your initial outlay is covered.