3 Reasons to Sell Stocks Now

Contrarian Profits — Tue, 05 May 2009 17:38:54 +0000

We’re comforted by the fact that we’re in good company in our bearish stance. Stansberry and Associates’ Jeff Clark left the party when the S&P 500 crossed over 855. He says there are three brutally bearish sell signals right now:
1) Insiders are selling stocks at the fastest pace in two years.
2) The CBOE put/call index is at a frighteningly low level.
3) Stocks are overbought: 91% of stocks on the S&P 500 are above their 50-day moving averages.
Here’s Jeff on why he remains bearish:
So while everyone else is dancing with lampshades on their heads and celebrating the 0.6% gain in stocks this year, smart traders are preparing for the next big move.

It’ll be to the downside.
Stocks are overbought right now. That’s clear. And there are times where extremely overbought markets get even more extreme. It looks like we’re now in one of those times. So the market can still work its way higher.

Buying into these conditions, however, is rarely a smart move. The risk/reward weathervane is blowing strongly in the direction of risk. In fact, we’re rapidly approaching the best short-selling opportunity of the year.

What’s Your Exit Strategy?

Charles Delvalle — Wed, 30 Apr 2008 15:02:47 +0000

What do the Iraq War and 90 percent of investor’s have in common? There’s simply no exit strategy in mind. So if an exit strategy is so important, why don’t most investors plan for one?

The first reason is because they simply don’t know that it’s part of investing successfully. Learning about stop-losses and risk management simply isn’t as sexy as learning about how to make triple-digit gains. So the subject is often avoided.

Second, it’s a matter of emotions. You see no one in the world – not me, not you, or anybody else – enjoys selling stocks at a loss. It’s a pain that nobody wants to inflict on themselves. So as long as they don’t sell at a loss, they never end up ‘inflicting’ the pain.

Then there’s the prospect of selling at a loss and then looking at the stock a few weeks later, only to find that you could’ve sold it for a gain. Now, the investor might feel embarrassed or foolish. Nobody wants that. So emotionally, it makes sense why a lot of investors don’t follow through with an exit strategy. But logically, an exit strategy is IMPERATIVE to making money in the stock market.

If people didn’t take their losses, then they’d never free up capital to pursue better opportunities. Heck, if people didn’t take their losses they’d eventually have no capital at all.

This is a situation you don’t want to put yourself into. So before you get into a trade, MAKE SURE to have an exit strategy planned. And you should do this for every single trade.

If that means selling your position once you lose ten or fifteen percent, then follow through with it! If your exit strategy is simply to sell if the fundamentals of your buy change, then make sure to follow through with it!

Either way, just remember to ALWAYS have an exit strategy before you invest. And more importantly, FOLLOW THROUGH WITH IT!

Good trading,

Charles

Contrarian Stock Market Investing News - Featuring Bargain Stocks » Selling Stocks

3 Reasons to Sell Stocks Now

What’s Your Exit Strategy?