At what profit point do you usually sell a stock?

EthanR answered 11 months ago …

I say it depends not only on the profit, but on the time frame. For example, I am more of a short term trader, so if I get 10% within a short period of time, I will often sell the stock and try to buy it back later at a lower price. Stocks often run up quickly, then as they become overbought, retrace their gains before moving higher. This is best done in an IRA account rather than a taxable account, as the taxes and commission costs will eat into your profits a great deal in a taxable account.

Another issue is the price at which you bought the stock. We have recently witnessed a severe decline in the markets. Say you buy a well beaten down stock (that once sold for $40) at $10. In a few months, the stock is at $13, a 30% gain. If you are a long term investor, why sell it there? In a few years, that stock will probably be back at $20 or higher, if you were smart enough to buy it at or near the 52 week low.

All in all, it's a personal decision and each of us is unique in what we seek. Maybe the best answer is to tell you to look at your own psychological make up and figure out what you are most comfortable with doing. Are you willing to risk giving back a 10% gain? How about 20 or 30%? Do you kick yourself for selling too soon all the time? Does greed get in the way of better performance? How about fear? The answer to these questions should help you to determine where the best place for YOU to sell will be. Good luck.