From the course: Behavioral Finance Foundations
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Deciding when to sell a stock
From the course: Behavioral Finance Foundations
Deciding when to sell a stock
- [Instructor] Selling is the hardest part of investing, the reality is that fundamentals drive stock prices over the long term, but in the short term, psychology sets prices. For most investors, they have a very hard time selling. If their stock is doing well, they don't want to let go of it. They want to hold on to it in case it keeps going up, and so they can't sell. If the stock is doing badly and the price is falling, they don't want to accept their loss and so they can't sell. The reality is, you have to learn to sell well or you're going to do it badly. So there's a number of tips I'd suggest here. First of all, you should consider selling any stock you hold that starts to show a weakness in certain areas. Now, you can find information online to help you track the variables or factors we're about to talk about, but my first selling tip is around earnings per share. You should consider selling stocks where earnings…
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