Sell Stock

Investing one's money in stocks always was, is, and will be the kind of investment that gives the best returns. But only when this investment is viewed as long-term investment. The decision to sell company stock or not should always be viewed based on the performance of the particular company over a long period of time, at least 12 month. To sell your stocks because the share price of a particular company has gone down over the last quarter, or because you expect a small profit from the sale, might backfire.

Factors that should be taken into account are, for example, whether the company is increasing its sales. Is this growth in sales related to a product that will still sell well in a year's time? Or is the growth in sales related to a one-time event, like the launch of a new gadget during the holiday season?

Are profits down because the company just invested in new production facilities, but these facilities will enable it to manufacture its goods cheaper in the long run? Or is the company itself repurchasing its stock in the open market, which is a good sign because management feels that the company's stock is undervalued.

A good reason for selling your stock in a particular company is when the company itself, and not the market, has experienced fundamental change. It might have changed its management structure, developed new business strategies that hold little promise, expanded on their mission statement and introduced a totally new product line. In a case like that it's wise to sell since all future earning projections are not based on past performance.

If you have decided to sell a particular stock, the first thing you should try is to sell it to a friend, a colleague or any other acquaintance. You don't have to pay commissions to a broker if you make the sale yourself. And brokerage commissions can definitely hurt your bottom line when selling stocks. You want to learn to sell your stocks on a shoestring budget.

One way is to invest and sell your stocks through dividend reinvestment plans (DRIP). These plans enable you to significantly reduce or avoid altogether broker fees. Or work with a discount brokerage firm instead of with a broker that provides a full service. The fees they charge are a fraction of what full-service brokerages charge.