You bought a stock at the beginning of the year and its price has risen dramatically. What do you do? Here are some things to consider when this happens.
- First, investing can be emotional. Don’t let the emotion of greed drive your investing strategy.
- Second, be disciplined. If you have certain parameters about how much of a stock you can have in your portfolio, don’t violate that parameter.
- Third, one idea is to sell half. This allows you to take what you invested out (maybe a bit more or less) and let your profits stay invested.
- In the end, one doesn’t get hurt taking a profit. If it’s outside of an IRA, you will have to pay long /short term capital gains, but having a gain is better than having a loss.