When it comes to investing in the stock market sometimes it really is hard to know when you
should actually sell your stocks or get out of a position completely but honestly at the end of
the day as long as you're making money most of the time and not losing money then that's what
you want to be doing and you can just move on with your life and you don't have to look back
now obviously if you do end up deciding that you want to sell off your shares
there's always the potential risk that you're going to lose out on potential gains so for
instance if you get out of a position and then all of a sudden that company does a lot better
that's obviously money that you missed out on but as long as you're making money most of the time
that's the goal and there are really some common signs that you can look for that might
be a trigger as to when you should start selling and that's what we're going to be going over in
this video so i'll be going over the five common signs that you might want to sell off your stocks
but ultimately there is a lot that goes into it and these are just five normal signs that you can
look for but at the end of the day you are going to have to make that decision whether it's right
or wrong but these are just some common things that you can look for and then keep in mind that
i am not a professional financial advisor i am just some guy on the internet so please just take
this advice for entertainment purposes only and if you do run into a pickle seek professional advice
because that's always the best route that you can go now before i go into the five common
signs that you should be selling your stocks i do want to talk about the number one reason why
most people end up selling their stocks and that's just the fact that the price is high and then it
drops and most people end up freaking out and they emotionally get out of those positions and that is
not something that you want to be doing because if you're investing for the long term then all of
the day-to-day fluctuations shouldn't really matter very much because you're looking into
it so far into the future so technically if there is a drop on a company that you really believe in
then maybe it's time to buy more shares and not get out of that position just because
you're scared but actually buy more because it's a better value because you're looking into the
long term now let's go over the common signs as to why you should probably sell your stocks
and the first sign that you should look for is if the fundamentals of the company have changed
meaning kind of the nuts and bolts everything that runs inside the company is not exactly going in
the direction that you'd like it to so basically if you're invested in a company and you notice
over time that their long-term profitability starts to go down meaning their profits aren't
as good as they used to be because of some reason or another inside the company or maybe you just
don't agree with how their lifestyle is anymore then that is a reason or a sign that maybe you
should look into selling that position and sometimes you might even run into a company
where their ethics or their political stance is slightly different from what you believe in and
if that's the case then that might be something inside their fundamentals that you just don't
agree with anymore and that might be a reason to leave now the next common sign that you want
to look for is if the stock price keeps going up relative to how much money they're actually making
because if they're not making more money while the stock price is going up at the same time
then that's a sign that you're in a bubble and typically bubbles are going to pop you
just don't know when that's going to happen so if you're invested in a company and the stock
price just keeps going straight up but there's no real reason why that's happening maybe it's just a
popular company you don't want to be trapped in a bubble because it is eventually going to pop
so what i would recommend doing is possibly looking into selling those shares while you're
up ahead and then waiting for the company to correct itself to get back down to a normal value
where their profits sit so it's just intrinsic normal value that's fair priced and that's when
you want to get back in on the position so that you're more value investing for the long term
now the next sign that you can look for when it comes to selling your stocks has to do with
competition and this is a big one because if you see something coming around the corner
and the company that you're invested in is not adapting to the new way of life then they can
get obliterated and this is something that you don't want to have happen because if they go off
the charts then you lose all your money and that investment is nothing to you so the best example i
can think of here when it comes to competition is blockbuster video if you guys remember them in the
90s and early 2000s they were who you usually went to when you rented movies but eventually
streaming services started coming out like netflix apple google lots of other companies stream movies
now so that you don't actually have to physically go out and rent them and at the time this seemed
like it wasn't something that was a big threat because it was hard to do on the internet it
required a lot of bandwidth different things like that but eventually netflix figured out
a way to stream content and this was a big deal because blockbuster got obliterated because they
didn't adapt now obviously i wasn't in their shoes i don't know the full story but in my opinion i've
always felt like they had the opportunity to adapt and they didn't so the saying is adapt or die
they didn't follow suit to that and that's why i think blockbuster isn't around anymore
so when you're investing in a company just make sure to pay attention to that competition
because competition honestly is pretty good in most cases it's going to help people innovate
and help them actually better improve their customer service and their offerings but if you
don't see them adapting then pay attention to that because if they're not going to adapt then they're
probably going to die now the next sign to look for is the fact that sometimes the investment that
you're in is just too flat and it's not doing anything and you might be better off putting
your money in something else because there's a better opportunity out there so for instance if
you invested in a company and you held that stock for let's say five years but over that five years
of time you only saw gains of maybe one or two percent per year then maybe it's time to just look
at that for the reality that it is that it's not the best use of your money and so what you want to
do is get out of that position and put that money somewhere where it can be working for you better
because obviously five years is a long time and if it's just not doing enough for you then maybe it's
time to move on now you're never going to know the future and you're not going to have a clue if
that company is going to start to perform a lot better but if you've given it enough time then
maybe it's just time to let go and honestly if you are still interested in that industry then maybe
just get out of that specific company and move it into a different company within the sector that's
performing better that way you're not getting out of it completely because now you're just in a
different company inside the same sector that you obviously believe in in the first place and that's
why you're investing in it now the next sign that you can look for has to do with dividend investors
and this is dividend cutting and this is something that you don't want a company to be doing to you
if you're relying on those dividends and you have a very large position in them so for instance if
you have a huge position in coca-cola and you rely on those dividends and all of a sudden you start
to see the signs that maybe they're going to cut their dividend then maybe it's time to get out of
that company because usually when they cut their dividends their stock price is going to go down
for a little bit it doesn't mean it's the end of the world the dividends can obviously come back
but if you do see those signs you want to be careful and maybe it's time to get out
so if the company you're invested in has a history of cutting their dividends in the past
or if you're starting to see some signals right now like for instance they're having a really hard
time because of the economy or something like that or you're getting trickles of the news telling you
that they're considering cutting their dividends then maybe it's something that you want to look
into because if you're relying on that money as part of your own income then that's probably not
a position you want to be in if you're going to be risking losing that income now obviously
if you own shares in any company out there that pays out a dividend you always run the risk that
they could cut the dividend but there are things that you can look at you can check their history
you can see how long they've been paying out a dividend and a lot of that can give you a lot
of confidence knowing that they're probably not going to cut it even if the economy takes a turn
so just do your research make sure that you're investing in companies that probably aren't going
to pull their dividend but you never know it's always a risk it's just something to be aware of