Fire Your Stock Analyst!: Analyzing Stocks on Your Own

When to Sell

Growth stocks can drop quickly, and your first loss is often your best loss. Develop strict sell guidelines and don’t procrastinate when one of your guidelines is triggered.

Target P/E or PEG Limit Exceeded

Review your target price assumptions before taking action. It may be that your original sales or profit margin assumptions are out of date and can be revised.

Exceeding your target price means that the stock has entered a higher-risk zone, not that it won’t go much higher. Growth stocks often develop strong momentum and go far beyond levels justified by fundamental analysis. You should have a profit at that point. Sell some or all of your position depending on your risk tolerance and on your ability to track the stock on a daily ...