Last Updated on Apr 8, 2020 by James W

To make money, you have to locate the best investments and have the guts to pump in cash. When you look at investing like this, it seems as if the only thing to do is research. Once you have your golden goose, it will do all the laying without any involvement for you or anyone. The truth is that one of the significant parts of investing is to know when to sell. Do it soon or too early and you will lose a lot of money, and that’s a fact. Reaction time and emotional maturity are essential skills in the industry, and here’s how you can acquire both.

Don’t Listen To Emotions

Think with your head and not with your heart. This cliché sounds easy enough on paper, yet it’s a difficult goal to achieve in practice. There will always be voices in your head saying “we can make even more??? but try not to listen. All those sounds are is your greed looking to lose you a small fortune. The same goes for when the stock falls and you want out prematurely. As a rule, experts believe in holding options for at least five-years and longer. Setting a minimum date for cash out can help you maintain a clear head.

Look At The Big Picture

So the share price falls or increases and you want to strike while the iron is hot. However, a single movement, however big, is just one piece of the puzzle. To see the whole picture, you need to look at the data from the past couple of months or years. Cryptocurrencies are the best example. Anyone with a Bitcoin investment could cash in now and walk away with a healthy ROI. But, the figures suggest the currency has got lots of potential for growth with a 103% return on the last three months.

Identify Overvalued Options

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Having a long-term plan is essential, but you shouldn’t be afraid to react to changes in the market. Although this sounds contrary to the advice above, it isn’t when you consider the overvalued stock. Sometimes, assets jump in price for no reason. When this happens, the amount isn’t going to get any higher but it will get lower. Once you identify overvalue, you should react ASAP and sell. Otherwise, the only ROI in your future is a negative one.

Set A Price

Investors are like homeowners looking to sell: they have a price. You should do the same because the number is the amount which would constitute a success. For instance, you may think that a 10% or 20% ROI is incredible and cash out when the investment hits the mark. That’s fine and you shouldn’t let the rise or fall of the asset impact you after the fact. Yes, it may increase, but you got what you came for and that’s the important thing. Also, consider a stop order for when shares begin to drop dramatically.


Essentially, the right time to cash out is when the data tells you to act.


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