Stocks are the most popular type of securities investment there is, especially for “Main Street types” who may never understand esoteric instruments such as junk bonds and derivatives but who can be educated in good old-fashioned business fundamentals so as to increase the odds of their favor.
Knowing what to buy and when is a vital skill.
One way to figure out a good bargain is to look at a business as a company you own yourself – for indeed, that is the very concept of a stock owner!
And looking at a business this way, it should be a reasonably straightforward case, then, to choose whether business is good.
Conversely, the same perspective is helpful for knowing when to unload your share of stock.
After all, as a stock owner, the company belongs to you to the proportion in which you have shares; Discovering when to sell your company, in a sense, would be the same, then, as knowing when to sell those stocks!
Think it over: why do anyone sell stocks?
Simply because they imagine that the importance of the stock will go down – and not just a little, but significantly; in reality, sellers are betting that the cost will never recover!
Why may anyone ever sell the golden goose, a goose that lays golden eggs?
If they simply need the money, they could have very easily borrowed against the value of the stock – if those are good stocks, of course.
(And if they aren’t – well, that’s why they’re selling!)
So should it ever become necessary to un-load your stocks, perform a final check first: can you really sell your company now, for the price being offered?
Think of things that way, as if you owned the business yourself.
Unless you’re basically speculating (which is different from investing proper), don’t sell the stock if you wouldn’t sell your company!
