When is the Right Time to Sell?

This article is inspired by a Facebook post in one of the many groups where people discuss stocks and the stock market. In the post the author was celebrating that he was right about foreseeing a correction in the market, and the everyone should’ve been listening to him and selling their stocks on the top. That post inspired this article about: when is the right time to sell?

No one has a crystal ball that can predict the stock market. Every day some random person, expert or investing guru out there is announcing a crash or a boom. The fact is that no one can predict exactly when it will happens and if you sold on the top of the market, you were lucky. Timing the market is not possible.

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”

Warren Buffett

However, it is possible to invest intelligently and that’s what I write about here on this blog and teach in my course and in my investing webinars. You must understand the business, choose management with integrity and passion and pick the winner in the industry. And then of course buy it at an attractive price. A price we can easily calculate using my valuation tools. We can’t time the market, but we know our buying price and when the stock gets to that exact price, we’re ready to buy shares.

This leads me to something else I see happening now: people selling when the market is low. I see lots of questions starting with "Should I sell…?" For value investors like us this question is easily answered: is the business still wonderful? Is the management still reliable and driven? Is the business still leading the industry? If the answer is no, it's not wonderful anymore then it’s time to sell (and because we bought at an attractive price we can sell with a profit). If the answer is yes, it’s still a wonderful business, we hang on tight and hold on to the stock. Warren Buffett, who only invests in wonderful businesses says: “Our favorite holding period is forever.”
Don’t sell when stocks are low – invest in a course and learn some tactics on how to keep your cool.

Does Warren Buffett ever regret selling stocks? Yes, even Warren Buffett makes mistakes and sells when he shouldn't. He has admitted that selling some of their Apple stock in 2020 was "probably a mistake".

If you want my selling strategy, check this article: When Should I Sell My Shares?