A couple of weeks ago I presented a list of the top 5 reasons to sell a stock. I thought today would be a good time to provide a list of the top 5 worst reasons to sell a stock. I have heard a huge amount of explanations for why to sell a stock, some legitimate, and some very stupid. This list will be a list of 5 reasons that quite a few people use to try to explain their reasoning for selling a stock. 
- It has been X amount of time, and that is how long I said I would hold this stock. If you are setting the amount of time you will hold a security before you buy it you are hurting yourself greatly. Investors must let the market decide when is best to sell, not the calendar.
- An analyst downgraded the stock. Analysts downgrade stocks quite often, and they are frequently behind the curve in downgrading a stock. Using an analysts downgrade as a reason to sell is a losing strategy.
- The stock is losing me money. Sure it is disheartening to see yourself losing money in a stock, but this is not a good reason to sell. The sale of the stock should depend on the fundamentals of the company and your prediction of their future, not the past price movements.
- Some silly indicator said it was time to sell. There are so many indicators out there that it is absolutely ridiculous. For example, the Super Bowl indicator, which is supposed to foreshadow the direction of the market. Don't fall victim to these traps.
- The stock simply can't go any higher after the run that it has had. This one has lost a lot of people just as much money as the also dumb "This one can't go any lower" theory. Precisely when one thinks there is no way the stock can keep going higher, it has a tendency to take off.
Individual investors would do well to stay away from selling their stocks based on these reasons explained above. Investing in stocks should be taken very seriously, which is precisely why I wanted to present this list to readers. I believe investing should be about maximizing profits while keeping track of risk, and the strategies listed above tend to minimize profits while inflating risk.
In the near future I will post a list of the top 5 worst reasons to buy a stock as well.
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