When to sell a value stock

For those of us who have dabbled in value investing and are aware of its lofty goals, chances are we have some idea of what a good company to invest in looks like. We may have even used some of our learnings to identify and buy some very good companies. And since as a general principle, value investing is about holding these companies for the long term, that is probably what we are doing.

So why is this a problem? It actually isn't a problem unless you have forgotten that there is a time to sell even value stocks.

When it comes to value investing, everyone seems to be obsessed with when to buy a stock which has long-term value, but less so with when to sell a stock. We talk about intrinsic value and the need for a margin of safety. We also discuss at length things like economic moats and not overpaying for them.

These are no doubt important aspects of your value investing journey. But recognising the right time to sell a value stock is paramount to your ultimate success as a value investor. So how exactly do you know when the time is right? What criteria do you consider? How do you find out if a stock has become overvalued?

Join us in the next webinar of Value Investing on October 19 at 12:30 P.M., where we answer these questions and guide you on selling your value stocks. Register now!

This article was originally published on September 30, 2019.