There’s a famous maxim in the investing world that goes like this:

“Buying is easy, selling is hard.”

We can spend weeks and months analysing a company.

But when the company’s shares crash for temporary reasons, we might panic-sell in an instant due to fear, erasing all our efforts spent on doing our due diligence on a stock.

That emotionally-driven action would be detrimental to our long-term investment returns.

Here are three guidelines to help us determine rationally when to sell a particular stock.

(Hint: Selling due to a stock market crash is not one of them.) 

Source: Giphy

1. When a Mistake Has Been Made 

The first reason is an obvious one.

This happens when we make a mistake in the original purchase of the stock, and the company is not as favourable as originally thought to be.

To handle this situation, we must have self-control and the ability to be honest with ourselves.

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