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