[[Start here]] → [[What works in stocks?|what works]] → [[maintain your discipline|discipline]] → when to sell --- Knowing when to sell is one of the hardest questions to answer in stocks. In every interaction I have with private investors, it's the one area everyone struggles with. Selling depends on your strategy, and you need very clear cut rules. Rules can be crafted from a top-down (portfolio-management) perspective, or a bottom-up (company-first) perspective. The following list is incomplete, but I am actively adding to it over time: - **Strategic selling rules** - [[keep losses small]] - start to [[sell stocks when the market trend turns bearish]] - [[only risk 1% of your portfolio on each position]] (also relates to position sizing) - **For discretionary investors:** - [[sell when the story has materially changed]] - sell when the reasons you bought no longer apply - [[peter lynch's when to sell rules by classification]] - sell when a stock diworseifies aggressively - [[sell immediately on a profit warning]] - [[only hold the highest quality stocks after a profit warning]] - Sell half on news of a bid - **For systematic investors:** - sell when the stock meets a valuation target - [[buy stocks at a rank above 90, sell below 70|sell when the rank falls below 70]] - sell when the holding period meets a time threshold - sell on targeted rebalancing period - sell at limits of opportunity cost threshold - **Technical sell rules:** - sell when your profit target is met - [[sell into climax tops on parabolic moves]] - sell when the price moves below the (200 day) moving average - [[sell stops should be raised on each new high]] - [[stop loss levels should scale with volatility]] - Sell when position gets too large - Sell when there’s a better story/idea - Selling - strategic - QVM factors - Managing man overboard moment ## Quotes [FT Jim Slater Interview](https://www.ft.com/content/9181cf10-3ec2-11e2-87bc-00144feabdc0) > I’m more interested in how he decides when to sell. “The very worst time to sell is when you have an unexpected happening and there’s a terrific fall,” he says. It often pays to wait a day or two. But on the other hand, he doesn’t believe in hanging on for recovery or buying more so as to lower the average entry price. **“As soon as you get a profit warning or a major disappointment, you sell. The first profit warning is usually followed by another,”** he says. He cites Andor, a company he once owned but which had a profit warning after he sold it. The share price has partially recovered since, but he’s not tempted to get back in. The other reason to sell is when a company simply no longer fits the bill. **“You sell a good stock that’s performing well when it no longer meets your criteria. I try to buy companies that are special, and sell them when they become ordinary.”**