Should I Sell My Shares or Keep Them and Buy More When the Stock Starts Taking Off?

Once the target has been hit you need to sell and move on to the next opportunity, however, there can be exceptions.

Filip Dimkovski
By Filip Dimkovski
Edited by Taj Schlebusch

Published April 22, 2021.

When you buy a stock, you should put a price target on it, that way you'll know that when the stock hits that target. Once the target has been hit you need to sell and move on to the next opportunity. The only exception to this is when the stock still looks like a bargain, even after you’ve made a profit.

I have Warren Buffet as my investing role model, and I must share his valuable piece of advice:

“We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful.”

I am more of an aggressive investor myself, so I’d want to sell profitable investments in one of these two situations:

  • The investment is no longer sound or has become too expensive and exceeded my determined price target.
  • I want to liquidate the investment to invest elsewhere, rebalance my portfolio, or simply use my cash.

In the end, there is no bulletproof strategy on the right time to sell, but the key is having a disciplined policy on why you buy, how long you hold, and when you sell. Do not become blinded by paper gains and forget to cash in your winnings when it makes sense to.