December 12, 2011
In order to achieve long-term financial success and comfort, all people will need to place at least some of their money in risky investments, such as stocks. Since the value of stocks are pretty volatile, knowing when to buy the stock and when to eventually dump it are very important factors which could have a huge impact on your total eventual return on investment.
One situation when you should consider dumping a stock is when you see stocks of competing companies begin to decline in value. If you notice the company’s key competitors report poor financial results for a couple of quarters, it could be a sign that the entire industry will be going through downturn. Even if the company that you are investing in remains financially strong, worries over the industry are sure to push the stock price of your company down.
Another sign that it may be time to dump a stock is if negative news is beginning to come in about the company. If negative press, whether it is financially impactful or not, begins to come it, it may be time to consider selling your investment. Bad press about a company could deter customers and investors, which could destroy a stock’s value.
