Advice: Reduce Angst Buying or Selling Stocks

Someone that I know invests in stocks, and he does really well.

However, he says that the stock market tends to drive him nuts.

He told me about a time that he heard something about a sudden event on the radio, and the first thing he thought to himself was, "I wonder how this will affect the price of XYZ stock."

The second thing he thought to himself is that he's going absolutely NUTS. The event had NOTHING to do with his stock. He was just THAT consumed with his stock.

He asked for some advice on how to avoid that emotionally fueled angst he gets every time he's in the stock market.

Here is what I wrote to him...........

Great Advice: Any Investment Type

I was talking to an investor the other day, and I mentioned to him how I was struggling with a stock that jumped much high much more quickly than I planned.

Finally I sold it.

He made a good point by asking my something.

The question...Would you buy the stock (or any other investment) at today's price?

If the answer is, "No," then you probably should sell.

Even if the price rises later, you guaranteed that you got as much money from it as you felt it deserved. Asking for it to even higher yet is just being greedy, and we all know how well THAT works over time.

That's great advice...Take your profit and run. No need to be greedy.

By the way...The stock dropped to almost half of its value during the next two days.

When to Sell Stocks

A lot of people complain that people will tell you when to BUY stocks, but they never tell you when to SELL those same stocks.

Of course, nobody knows exactly when to sell, but here are a few guidelines that I use: