Devoted to understanding the basics and fundamentals of investing

Today I want to take a look at the top 5 reasons to sell a stock. These five things are what I believe to be the best reasons that you can have to sell your stock. For many investors when to sell their stock is the hardest decision for them, and I'm hopeful this list will be of benefit to them.

1. The fundamentals of the stock are deteriorating. Basically this is a case where it is generally a good idea to sell a stock when the reason you bought the stock is not applicable anymore.
2. The stock has done extremely well and you are looking to take some profits. There are times when it is certainly a good idea to lock in profits and not be too greedy.
3. The money is needed for a specific personal reason. In general it isn't a good idea to use your investment portfolio as a type of savings account to dip into constantly, but things happen to where it does come up from time to time.
4. The stock is clearly overvalued. If you see that the stock is signifcantly overvalued as compared to its peers or the overall market, it probably isn't a bad time to take some off the table.
5. To cut your losses on a stock that was clearly a mistake. This happens to the very best of them. People make mistakes, and mistakes need to be cut ties with after its clear that you made the wrong move.

These five reasons are all very viable reasons to sell a stock in my opinion. Investors need to be careful that they don't just sell after they see a couple points higher or a downgrade from an analyst. Stocks have always fluctuated and they always will. Selling a stock because it fluctuates too much for your risk tolerance just tells me that you didn't do your homework enough before you bought that particular stock.

Use these five tools to help you decipher when might be a good time to sell one of the stocks in your portfolio.