When to Sell and When to Stay Invested

 One of the toughest questions for any investor isn’t when to buy - it’s when to sell. Selling too early can cut short compounding. Holding too long can turn paper profits into regrets. The key is knowing why you’re selling. Here are a few guiding principles.

When to Sell

1. The Fundamentals Have Changed
   If the company’s core story weakens - slowing revenue, rising debt, poor management, or a loss of competitive edge - it’s time to re-evaluate.

2. The Stock Is Overvalued
   When prices run far ahead of earnings or book value, it may be wise to book partial profits and redeploy into better opportunities.

3. You’ve Reached Your Goal
   If the investment has achieved your target value or fulfilled the goal it was meant for (say, your child’s education fund), don’t hesitate to book profits and move to safety.

When to Stay Invested

Stay invested when the business remains strong and your goals are still far away. Short-term volatility is normal - long-term compounding is where real wealth is built.

As Peter Lynch famously said, “Far more money has been lost by investors preparing for corrections than in the corrections themselves.”

The best investors aren’t constantly selling. They hold quality businesses patiently — and act only when fundamentals or personal goals demand it.