Follow up question: When should I sell my stocks?

Question

This is more info about a question I asked earlier.

First of all, I know nothing about the stockmarket and am not really interested in it. The company I work for gave shares of its stock to employees a few years ago. Right now, the stock is at a higher point than it has been at in awhile and a lot of my co-workers are selling theirs.

I would just like to find out information about when is a good time to sell my stock, the future projections of it, etc. I would hate to sell it now to only see the stock rise even more. So, I want to make at least a somewhat-educated decision about this.

Any info would be helpful!

Answer 1

Given that you have no interest, you have two choices: sell now and take the profit... or, hold on to it for a long time.

I'd suggest that later, unless you believe that the company is going down the tubes. Yes, there's always a risk in holding. But unless you need the money now, you might as well just leave it.

If you sell now, where are you going to put the money? Unless you have an immediate need or another investment, I don't recommend selling for selling sake.

Answer 2

I think it all depends on when you need the money and what you need it for. As a principle, your investments should be matched to your needs in time, amount and currency (the later seems not to be an issue).

The first thing that seems to be true is that you were not expecting to sell the stocks, then there was no "timing" for it. Looks like you were not expecting this incremental amount either, then, there was no "amount, therefore, I think the decision should be based on what's the alternative use of the $$ compared to letting the stocks be there and gain more value. Is there a way of making this $$ "produce" more? if so, then sell the stocks and invest in the other option, if not, let it be there and gain value.

If what your co-workers are doing is cashing the stocks to expense the $$, in the future they won't have "extra-income" available (unless they have information that is not available to the public that will make the price of the stock go down, which then makes the decision to sell questionable in the eyes of authorities).

There are a lot of tutorials in the Internet, but you'll spend a lot of time reading them and, unless you are planning to dedicate your time to invest in the stock market, I don' recommend to go and look for the info. and read it...

Answer 3

There are a number of factors to consider:

1) Risk. Stock investments always contain an element of risk. The stock is not likely to continue going up up and up. There is likely to be down peroids as well. So ask yourself if you are comfortable with the possibilty that the stock could drop significantly in value, and whether or not this would disturb you. If yes, then sell. It is IMPOSSIBLE to predict whether the stock will continue to climb or drop. All it takes is one bad quarter and the stock may drop significantly. So I would recommend: go with your instincts.

2) If you sell the stock, the gain on the value of the stock is taxable. If you have held the stock already more than 12 months, then you can only be taxed 15% of the gain. But if you have held the stock less than a year, your tax on the gain could be higher.

3) If you are averse to the risk associated with your Company's stock, you can always sell it and deposit that money into a 4 star mutual fund recommended by Morningstar. Or buy one more more CD's (Certicates of Deposit) with your local bank. CD's are a very safe investment, but with lower risk always comes lower returns.

Answer 4

Well, is it a nice little bundle? If it is then it's time ( maybe) for you to change your feeling about the market....
Does the company also have a 401? Is that where the stock is? If so, it's just a simple matter of transferring it into some other available fund. BUT..if you don't have the 401...get that money into IRA's of some sort ( recommend Roth )...
Go to yahoo/finance or moneycentral/msn...find out just a little about investing....then get yourself to Fidelity, E-trade, Vanguard...and put that " gift" away for your future...Oh! it will add up ...and oh! you'll think highly of the company when you walk away..( retire)
It's just a little reading...a couple of nights...just get the " basics" down, get started...change somewhere along the line or just stay in a nice conservative mutual fund...you will never regret it.

Answer 5

The big question is how much do the shares represent towards your net worth?. Do you own company stock in the 401K program?. I would not own more than 10% of your company stock in your investments. In regards to the answer towards PE ratios, they mean nothing unless you are comparing the PE ratio to other companies in the same sector. You could always sell half and let the rest ride.

Answer 6

If you sell the shares, you should never compare the price afterwards, if we had the gift of seeing into the future, we'd all
be millionaires!
It is also virtually impossible to sell "at the top".
I would not be bothered about your co-worker dealings, unless they work in the Finance Department!
From experience, workers are avid sellers, as they often use these shares to supplement their income, you'd be better of looking out for Director's dealings, they do not tend to need the money!

Answer 7

It's not an easy question.
You should do a financial analysis of the company to find It's price to Earnings Ratio...If it is above 20 Sell, if it is under 15 keep it.

Remember, if you sell it, you WILL spend the money.
If you don't sell, there will always be a bit of money waiting for you.

Answer 8

The best thing to do is to sell your shares. Take the cash, put it in high-yielding saving account, and find out the next investment opportunity. Only this time, make sure you're passionate about it.