Don’t Fear Selling
Posted on Wednesday, June 4, 2014
The philosophy of Investor Advisory Service is that holding carefully selected stocks over the long term produces the best results. But no stock follows a specific timetable, and there are always ups and downs. Occasionally IAS editors may recommend selling a stock it previously recommended, because sometimes fundamental assumptions made at the time of a stock recommendation can deteriorate, and a revised view is needed.
A word of wisdom from the IAS methodology: Don’t be afraid to sell a stock when the need arises, even though it seems counter-intuitive to the concept of holding onto stocks over the long haul. Because IAS does not advocate a particular “trading strategy,” there is no established formula for when to hold and when to sell a stock. Replacing stocks occasionally is part of the normal process of maintaining a healthy stock portfolio. The art of successful investing is keeping an eye on the big picture and taking appropriate action when needed.