Whether you’re a novice or seasoned investor, it’s relatively easy to buy investments. I have some reflections on selling those investments.

Situation: Many are petrified at the thought of selling an investment.
Solution: Learn to recognize valid reasons to sell your holdings without regrets.
Summary: Adopt a selling strategy for the entire portfolio and apply it uniformly.

I submit that the selling part of the decision is the gut wrenching one. Often it’s full of fears, trepidation, emotions, and second guesses.

Perhaps, these questions bring back the agony of selling:

  • What if it goes up after I sell?
  • Should I hang on just a while longer?
  • Will there be a turnaround in the cards?
  • Am I making the right move?

Selling can be an intimidating and scary exercise for many. However, there is no need to suffer all the anguish and anxiety.

Knowing when it’s time to sell is a strategy well worth its salt. Selling can be motivated by market conditions and personal circumstances.

Selling is a topical discussion that investment professionals can have with all clients. The aim is to develop a sound and sensible strategy that addresses the concerns of selling.

Emotions can stop investors in their tracks when it comes to selling “high” or “low”. Selling is really about making decisions based on simple logic.

My reasons to sell
Let’s aim to take the scary fears out of selling. Here are some valid reasons for selling:

  • Investing fundamentals have changed.
  • Valuation is no longer reasonable.
  • Your profit target is reached.
  • Your asset mix range is exceeded.
  • You made a mistake selecting the investment.
  • You need the cash proceeds.
  • You find a better investment opportunity.
  • You changed asset mix targets in your game plan.
  • Tax loss selling makes financial sense.
  • Rebalancing to your target mix is desirable.
  • Prices drop below your comfort level.
  • Pursuing lower cost investments makes sense.

A smart move is to set and decide your selling strategy before you buy. You will encounter the least emotional attachment and make better long run decisions.

Selling for valid reasons takes the scariness out of the process. Look upon selling as a normal portfolio function, not a dreaded exercise.

Moreover, you may not need to sell the entire position. Selling some may be satisfactory or you can sell over time to average out.

Make your best selling decisions based on the course of action most fitting for you. Just enter the trade and move on. No looking back in your rear view mirror and no regrets please.

About Adrian Mastracci, Discretionary Portfolio Manager, B.E.E., MBA  My expertise in the investment and financial advisory profession began in 1972. I graduated with the Bachelor of Electrical Engineering from General Motors Institute in 1971. I then attended the University of British Columbia, graduating with the MBA in 1972. I have attained the “Discretionary Portfolio Manager” professional designation. I am committed to offering clients the highest standard of personal service by providing prompt, courteous and professional attention. My advice is objective, unbiased and without conflicts of interest. I’m part of a team that delivers comprehensive services and best value in managing client wealth.