Knowing EXACTLY When to Sell Your Stocks

Buying stocks is fun. There are so many sources you can go to for great ideas. Stock screeners, news reports, and, es- pecially, the great analysts here at Stansberry. As investors, we’re drawn to stocks that have exciting stories. We expend vast amounts of time, energy, and effort on figuring out the best stocks to buy.

But selling? Selling our stocks is hard. Really hard. How can you know when the right time is to get out of a position? Unfortunately, for most people, it boils down to guesswork. For instance, have you ever... ■ ■ Put too much money into a stock because you were excited about it? ■ ■ Tried to salvage a losing investment by doubling down on a stock? ■ ■ Told yourself that you’ll wait for the stock to get back to even before selling? ■ ■ Or ended up riding what should have been a small loss and turn it into a big loss that damaged your portfolio, or even wiped you out? Sound familiar? It should, it’s happened to everyone who wanted to become a successful investor. It happened to me when I began investing during the tail-end of the dotcom bubble. It happens to seasoned investors, too. Take Bill Ackman, for instance. To call Ackman a “seasoned” investor is an understatement, though. The man is a legend. Yet even Mr. Ackman isn’t immune from the mistakes we all make. It’s a good bet you know the story of Ackman’s

epic fail with Valeant Pharmaceuticals. Yet this chart still shocks me every time I see it.

Ackman made almost every mistake in the book. Buy too much of a stock you’re excited about? Check. Desperately try to salvage the position by buying more? Check. Refusing to cut losses and riding the stock all the way to the bottom? Check. Now, it may sound a bit arrogant, but I have no doubt that if Bill Ackman had TradeStops to help guide his decisions, he could have eliminated a lot of heartache... and had a nice profit to show for it. I created TradeStops to help investors avoid just that kind of nightmare scenario.

2 | Knowing EXACTLY When to Sell Your Stocks

Made with FlippingBook - Online magazine maker