Being a long-term investor does not mean you are holding your investment forever. In fact you only truly MAKE money when you sell an investment.
Owning an investment means you should be consistently monitoring the fundamentals of the business. After all – you are a fractional business owner.
Inevitably you will find yourself up or down 20%, 30%, 50% or more. Should you sell to cash out or cut your losses?
To help when to decide when to sell your investment ask yourself these three questions...
Has the business deteriorated permanently or shifted away from the reason you invested?
Are there are better opportunities out there for my money?
Was I wrong about the business?
If you answer YES to any of these questions – it's probably time to sell your investment and find a new home for your money.
If you are on the fence, consider selling 50% of your shares. You can always sell the rest or even add more shares at a better price.
Being an investor is more than just picking the right investments. It's also knowing when to sell those investments. You are a business owner – check in on it regularly!