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I often find selling harder than buying. You should periodically review each position in your portfolio and ask yourself the following questions:
1) Has this stock achieved the goals you had in mind when you bought it? If the answer is “yes,” go to question number 3; if it is “no,” go to question number 2.
2) Has something changed that makes your original thesis in buying the stock unlikely? If the answer is “yes,” you should seriously consider selling it; if it is “no,” that often means you should continue to hold the stock.
3) Are there new factors that have arisen since you formed your purchase decision that are likely to make the stock go higher? If “no,” then perhaps you should sell; if “yes,” you may want to continue to hold.
Of course, these are just generalizations. Every situation is different, and there are many other questions to ask, including “Do I need the cash for something else?” and “Is there a tax consideration that would make me want to sell now?”
(Question submitted by Dr. Mike)