When to Sell

Mar. 27, 2023 | RedChip Companies

One of the hardest decisions small-cap investors face is knowing when and why to sell a stock. Monitoring a stock for changes in earnings and revenues should be done frequently. Changes in a company’s fundamentals and other announcements can signal a modification in a company’s growth. Wall Street may view a lack of growth as a loss of credibility or momentum and send your stock lower. Put a limit on your stock losses; if you are down big and the reasons you own the stock have changed, cut your losses and sell. On the flip side, when should we take a profit? An old saying comes to mind: “Pigs get fat and hogs get slaughtered.” Same idea here. Place a profit in mind and sell when you’ve made a specific gain, or sell enough to cover your original cost and the rest is gravy. Know your limits and practice discipline.

"I work with many of the companies that would be RedChip companies. And we certainly ascribe to the same view that the RedChip Companies do, which is Discovering Tomorrow's Blue Chips Today."

  • Bob McCooey, Senior Vice President, NASDAQ Stock Market