Not A Stock Wizard? Avoid These Investing Mistakes, Part 3
Going for broke. Buy low, sell high. How difficult can that be? For many of us, it's almost impossible. It seems that lots of folks can tell you when to buy a stock (your brother-in-law, your golf buddy, even your broker), but few can tell you when to sell. See if this sounds familiar: You buy shares in a stock you like and the price begins to rise. It continues to rise until you have a profit of more than 20 percent. You're now faced with a classic dilemma: Do you take the profit and run? Unfortunately, no one has a crystal ball. You may have a pharmaceutical company with the cure for cancer on your hands, but there's no way to know for sure.
One possible strategy? When buying, set a target price at which you'd be happy to sell. When your shares get there, re-evaluate your decision to see if you'd buy the stock anew at the higher price. If not, sell, sell, sell, and don't look back . . . unless the price falls to a point where you want to pick it up again.