 Today fellow investors, probably 99% of the investing videos you look of the investing articles you look at, you read are about what to buy, what is the best buying option, where to invest, what to do and so. However, probably even more important than what stock to buy is what and when to sell. Because knowing when to sell allows you to lock in the gains at the proper moment when those gains have to be locked in. Remember, stock markets go up and down. You want to lock your gains when the stock market goes up so that you avoid as much as possible the going down of it. Given that so many things constantly change in your market, interest rates, valuations, central banks printing money, central banks trimming their balance sheets, wars, crisis, recessions, it's very difficult to follow each and every step in order to know precisely when to sell what stock buy and so. However, I think there are five strategies that can help you very much, whether you're a trader or investor, in determining when it is the right time to sell a stock. The goal is of course to lower your risk and increase your return and selling helps especially to lower your risk when you are wrong and to increase your returns when you're right. So let's immediately start with the first strategy. The first strategy is always keep in mind why did you buy the stock in the first place. For example, if you buy a stock because the company is growing revenues at 20% per year and the stock grows at 20% per year and is expected to do so for the foreseeable future, then the reasons you bought the stock are still there even if after three years the stock is already up 100%. So you always have to look at the fundamentals. It doesn't have to be growth. It can be book value for example, price earnings ratios. I always like the example of Berkshire headway so let's look at that. Let's say you bought Berkshire in 2010 when its price to book value was 1.35. You considered it a safe investment as we all know that Buffett would immediately start buying back shares at 1.2 price to book value. On the selling side, you said no matter what happens, if the price to book value of Berkshire is 1.5, I will sell. So you would have bought in 2010 stock price around 100-120 thousand dollars and you would have sold in 2014 when the stock price reached 220 thousand. Then you would have bought again in 2015 when the stock price fell below 200 thousand and you would have sold again now when the stock price went above 250 thousand. So looking at fundamentals, looking at something in the business that has a straight line that is not so volatile as the stock market can really help in determining when to sell and when to buy. If you're an investor especially value investors have this really easy, you look at how undervalued the stock is, look at what are your expected returns which are usually a straight line and the stock price goes around that straight line. When it's much above that line, you sell when it's still below, you buy more. So having something fundamental, something business like really helps in lowering your risks and increase your returns. If we take a look at GoPro's stock price in the last few years, it's a clear example of how many investors get over excited about a stock and then don't sell at the right point. For example, if you bought GoPro in 2014 at 40 and you didn't sell at 86 just a few months later, kept it because you thought it's more and more valuable. Even if the price earnings ratio was 166 in 2014, you would now enjoy a loss of about 90 percent. So what a strategy that looks at fundamentals gives to an investor is discipline. No matter how exciting a stock can be, how overexcited can the market be about the stock, you simply sell when it's above your line and that discipline allows you to lower your risks and increase your returns. Of course, apart from fundamentals, there can be also other reasons to sell a stock. For example, you expect that a drug company releases a drug that will be approved and will really be a very positive drug for the company. That doesn't happen. Okay, then you sell, but then you know before you invest that your investment depends on a catalyst like the approval of a drug. So that's a situation where you know before investing, okay, I can lose so much if it goes bad, I can make so much money if it goes well. So that's also an approach to selling or buying a stock. The second strategy that helps in defining when to buy and sell is portfolio rebalancing. If you have a well-set portfolio, perhaps an all-weather portfolio, you know exactly how much risks each part of your portfolio carries. When, for example, the gold part of your portfolio, in this case here we have the Vanek Goldminers ETF, increases 100% and perhaps if it is 5% of your portfolio, now it is 10%, then you slowly trim it down to 5% in order to have equal portfolio risk reward allocations. If the 5% portfolio falls to 2.5%, you buy it up again to 5%. So portfolio rebalancing also allows for a simple straightforward strategy, keeps discipline and you simply move your pieces in your portfolio as your strategy commands. Not much thinking, no emotions and those no emotion strategies are perhaps the best strategies when it comes to investing. Another reason to rebalance can be because you have too much risk in one stock. For example, in this case is NetEase. Let's say you held 10 stocks in 2009 and one of those 10 stocks that you had 10% of it was NetEase. The stock price was 19, now it's 304. NetEase went up 15 fold, the stock market went up 3 fold, so now NetEase would be 35% of your portfolio. That's pretty high number to keep in one stock, so you might want to sell part of it in order to rebalance the risk of your portfolio. So rebalancing is a pretty straightforward, simple to use strategy. Again, if it's combined with the fundamental line, you can always rebalance around that fundamental line, around earnings, around valuations, buy more of the cheaper, better earning stock and sell the more expensive, over exciting stock. The third strategy why you could sell a stock is because there is something better out there. So for example, you have your own stocks and you find some stock or a stock became incredibly cheap that you have to sell something else. Now, if you would look, okay, which one is cheaper, which one is better, then you would trade, I think, in a day you would make 200 trades. That would eat up your returns just from transaction fees. So in order to avoid transaction fees, it's good to have a rule that tells you when to trade one stock for a better one. And who better to ask for such a rule than John Templeton. He had the rule that you exchange one portfolio holding for another only when it's 50% better than the other. Let's say we have two stocks where the true value is $100. Stock A trades at $50, stock B at $40. The difference now is $10, 10 divided by 40 is 25% so you don't sell. Let's say stock B trades at $50 now so it fell $10. The difference now is 20, 20 divided by 30 is 66%. In this case you sell A and buy B. So a simple rule like John Templeton's rule allows you to keep a cool mind and really mechanically adjust your portfolio holdings. The fourth strategy when to sell a stock is to use stop losses. A stop loss is an order when you say if a stock price falls to a certain level you automatically trigger a sale. So you protect yourself from the downside. Stop loss selling has good sides and bad sides. The good side is of course you're protected from the downside. The bad side is that the stock price can fall in between days much more than your stop loss is. So you're and then when the stop loss is triggered you sell at market. So you sell at what the market offers which could be much much lower than your stop loss. So that's one risk. The second risk is that you get your stop loss triggered and then the stop price goes up. For example those who bought Apple at $153 a week ago and put a stop loss in $150 let's say they bought the stock because they expect the new iPhone 8 to come out and the Apple stock to appreciate or they thought earnings would be good and the stock price will appreciate. If they bought it put a stop loss at $150 they would have sold at $150 and then when the earnings beat expectations they would have missed out of the outside. So their thinking was correct but the market irrationalities the market volatility pulled them out at the market at a loss. So that's again a risk of stop losses. On the positive side you can you really use stop losses as your main strategy where you invest and try to catch long-term trends. You invest in 10 trends and you make okay I can lose 2% per investment. So if nine of those trends go bad you lose 18% but if one goes well let's say they are long longer-term trends you can lose 18% but you make 100% on the good trend the trend you are caught. And then when the stop price that you nailed goes up up and up you make a trailing stop loss. So whenever that stock falls more than a few percentage point then you sell it. So a stop loss is a very very interesting strategy to automatically sell when a certain target is met and it should be studied to see if it fits your strategy your risk appetite risk reward appetite. An investor that never uses stop losses is a value investor because value investors like me they when the stock price falls we like to buy more. A trader would say we are crazy but each one of us has its own investing strategy. The fifth strategy is my favorite strategy when it comes to selling a stock and that involves selling a stock when you have reached your financial goal. That's the most beautiful reason to sell a stock. You can have I don't know a goal for traveling the world for buying a house for doing something with your life buying that old timer you really love when you were young retiring early something like that. So when you reach that goal then it's wise to sell stocks because stock prices are very very volatile and you might lose that goal which is something very very ugly. So when you have reached a goal you might want to think about selling stocks. When I was 22 years old I bought this boat for example from my gains later when I was 25 26 I sold my stocks to pay for my PhD a few years later I sold part of my holdings to move to London and search for a new better life. So in my 15 years investing career I have really had nice returns but every time that I reach a certain limit I prefer to sell a part of the portfolio in order to enjoy my life. I don't want to be the richest person in the cemetery as Steve Jobs would say I really like Buffett but I like Buffett for his annual returns. I don't want to be 87 and the richest person in the world. I would prefer to sacrifice a few millions when I'm 80 in order to enjoy a few thousands of 10 20 30 thousands when I'm 20 30 40 50. So I really think that having a clear goal in mind having a strategy is the best way to approach investing and the stock market can really help us in reaching that goal. At the end our life is not about money is not about investing returns and not about how big our portfolio is is about what we do with that portfolio. So I think now I'm again in the building part building phase of my portfolio so as soon as I reach a certain target I will again trim a little bit of it and do something nice with my family with my money. I wish the same for you. I wish that you reach your financial goals that investing in stocks perhaps even this channel helps you into reaching those financial goals and then selling your stocks or at least part of it in order to enjoy your life and leaving the full potential that your life offers. You don't want to die rich and I think you agree with that. So to conclude I think I have summarized the five main strategies when it comes to selling a stock and I think it can help each one of us to create really a clean strategy in relation to your risk reward appetite about what to do and how to go about selling because discipline is a key element in investing. The more disciplined you are the better will be your returns and the lower your risks. Thank you Prasan for your idea about the video as in this comment you asked about what is low what is high and how do you know when to sell a stock. If you have any comments please leave them below. If you have any video ideas please leave them below. The more your idea gets videos and likes from other watchers from other subscribers I'll soon or attend to that video. I like this interaction that we have here on the channel I think we are creating a community of investors where we learn from each other. I have learned so much from your comments that it really replaces a lot of my research that or it gives me ideas that I would never have gotten by myself so I am very very grateful and this is the greatest value that I can have on this channel and that is your comments and your idea sharing and your risk sharing and you're pointing out of oh Sven you're wrong here this is too risky or something like that so I really really thank you and I'm very grateful for each one of you that is watching. If you like the content please click like and I will see you in the next video.