When you've hit your financial target sooner than expected—go ahead and cash out. Celebrate your success when you have achieved the goal intended.

Life happens. There may be a financial/medical emergency. If you suddenly need money and have exhausted all your cash reserves, you have no option but to sell your fund.

If your portfolio’s asset allocation has changed (say, your 60% equity investment grows to 80%), it’s time to rebalance by selling relevant funds and restoring the original ratio.

If your fund consistently lags its benchmark index or peers, it’s a red flag. But before you divest, follow it closely for around three years. Knee-jerk reactions can backfire.

Let’s say your fund is giving off chameleon energy and changes from being a mid-cap fund to a small-cap one, you may say nay and bid bye to it.

However, there are three occasions when you need to be watchful and not necessarily SELL your fund. To know when, read the later half of the story.