3 Questions to Ask Before Selling

Eric • 24th Oct 2006 • Finance

I just read this article titled, “3 Questions to Ask Before Selling” and have some comments. First… ” Look at the conditions right now. Confidence in the market is obviously shaken…” Yeah, the record numbers the DOW has been posting affirms that statement, right? What’s this guy talking about??? While I agree overall market conditions shouldn’t determine your action on an individual investment, his argument seems odd at best.

Next, ” Question No. 2: Do I have a plan for where the proceeds of the sale will go next?” – I often sell without knowing where the cash is going. I’m sitting on cash right now, with nowhere good to put it. I have targets on each of my holdings and, when it hits there, I’ll sell it. If I *really* want to buy something, I’ll scrape up more cash & deposit it.

I think just the opposite is true. Sell when it’s time to sell, even if you sit on cash earning a mere 1.5% APR. You have a reason to sell, so sell.

Question 3 – yes, I agree.