Most new investors have a fair idea when they should sell. The standard is 10% loss, and it is time to sell. There are dozens of gurus who offer all sorts of signals and red flags to help investors learn when to invest and when to buy or sell. Some gurus say Its time to sell when the points turn negative. All of this information is good, but the investor needs to learn how to identify false signals.
There are some events that can fool investors into selling, but misreading the signs can result in having the portfolio compromised.
Falling Stock Price
A drop in stock prices is not necessarily a reason to sell. In fact, it may be a reason to buy, as the market corrects itself and prepares to take off again. This is because the stock does not always reflect a companys true value.
Take a good look at the companys current bank reports and any press releases, or other communication and PR releases. View the local newspapers and other information before letting emotions and panic force a sale. In fact, it could be a panic based on gossip, or other market factors dropping the stock price.
Rising Stock Prices
It is amazing to think of a panic...
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