Some investors set a target — say, a 30% gain — and take their winnings when the goal is reached.
3. Falling stock price: On its own, a falling share price is not reason enough to sell. In fact, it might be a good time to buy.
But if the drop in price is tied to a consistent decline in business results — revenues have been declining for more than two years, for example — exiting may be a good idea.
Some investors set a threshold for losses before they’ll sell. If a stock falls 20% from the purchase price, for example, it may be time to sell.
4. Dividend cut: Dividends are sacred to shareholders and companies alike, so when a firm cuts its dividend, take note.
It’s important to dig deep and find out what’s behind it. Many firms pared or suspended dividends in early 2020 to conserve cash during the pandemic lockdown.
But as the economy recovers, most of those payouts could be restored.
Other times, a dividend cut can be a hint of bigger problems, such as too much debt or declining earnings, and you’re better off getting out.
5. Portfolio imbalance: Sometimes a good reason to sell shares has more to do with your portfolio than the company.
