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When Should You Sell Your Stocks? 4 Best Times Every Investor Must Know

Confused about when to sell your stocks? Here are four practical scenarios that will help you make smarter exit decisions in the stock market.

Introduction

Buying stocks is exciting, but knowing when to sell can be tricky. Many investors hold on too long, hoping for more profit, or sell too early out of fear. In reality, there are four clear situations when selling your stocks makes sense. Mastering these exit strategies will help you protect profits and limit losses in the long run.

1. When You Can’t Answer Two Simple Questions

Before buying a stock, every investor should ask:

• Why did I buy this stock?
• Why did I buy it at this price?

If you can’t answer these two questions, it means you’re investing without a clear plan. In this case, it’s better to sell the stock and keep your money safe until you’ve created an investment journal that explains your decisions.

2. When the Stock Reaches Its Fair Value

One of the most rational times to sell is when the stock price hits its intrinsic value. For example, if you bought Bank BCA at Rp7,000 and your valuation suggests its fair price is Rp10,000, selling at Rp10,000 locks in around 42% capital gain—plus dividends, your total profit could be nearly 49% in two years.

Learning basic valuation techniques is essential to identify fair prices. This ensures you’re not just chasing trends but making calculated investment moves.

3. When Your Stop Loss or Trailing Stop Is Triggered

Even the best investors, including Warren Buffett and Peter Lynch, make mistakes. That’s why you must set a stop loss—a maximum loss limit you’re willing to tolerate. For instance, if you set a 40% stop loss, a stock bought at Rp1,000 should be sold if it falls to Rp600.

What About Trailing Stop?

A trailing stop follows the stock’s highest price. If the stock rises from Rp1,000 to Rp1,900 but then drops 40% to Rp1,140, selling at Rp1,140 still secures a 14% profit. This method:

• Limits losses
• Protects gains
• Removes emotional decision-making

4. When a Better Opportunity Appears

Sometimes, selling isn’t about losses but about capital allocation. If you spot a stock with greater potential than your current holdings, it can be wise to sell—even at a small loss—to reinvest in a stronger opportunity. This ensures your money always works in the most profitable place.

Key Takeaways

“The goal isn’t to never lose money, but to manage risks and let profits run strategically.”

• Create an investment journal to guide decisions.
• Sell when a stock reaches fair value.
• Always set stop loss and trailing stop levels.
• Be flexible—move capital to better opportunities.

Conclusion

Knowing when to sell is just as important as knowing when to buy. By applying these four scenarios, you’ll make more rational decisions, avoid emotional mistakes, and grow your portfolio sustainably. Remember, stock investing is not just about chasing profits but also about protecting your capital.

Have you ever sold too early or held too long? Share your experience in the comments—your story might inspire other investors.

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Finance

References:

• Video: Kapan Harus Jual Saham?
• Channel: Saham dari Nol
• Source: https://www.youtube.com/watch?v=69HYYKJ4J6I