As active investors, we tend to spend considerable time and energy researching when to Buy stocks but not nearly as much effort is spent deciding when to Sell. Sure we may be contrarian ‘Buy and Hold’ investors with the idealized holding period of Buffett but really companies change and so should our view of them as investments. Paper profits are great as ‘unrealized capital gains’ but there may be a time to sell even our best stocks. Even the great Ben Graham had a formula to sell and would do so when either 1) 50% gain 2) no later then the end of the second calendar year after buying. I do not fully agree with his criteria especially the short holding period but this strategy does make the profit real.

In order to make money beyond the market average one must use the irrational actions of Mr. Market both on the down-side as well as the up-side. Right now I actively search every day for solid stocks that have been hammered blindly into the ground along with all the others. In this type of bear market the volatility is amazing and good companies are being pulled to-and-fro in the tide. There are always opportunities to be had and now is a great time to go shopping.

Never buy without an exit plan.

I use my GlobeInvestor Gold subscription to track stocks and have many alerts set to ensure I don’t miss a target. Once we recover from this bear market I will spend time setting ‘Sell-Gain Orders’ on my holdings. Every 3 months I reassess my holdings using my own Financial Health Checklist - like a full physical by a doctor and reset the High Price Alerts so that I do not miss out on a sales opportunity. These alerts are either sent via email or as a text message to my cellphone. I then access my local Discount Broker and set a ‘Limit Sell Order’.  What if I leave money on the table? So be it. I will have locked in a gain and can shop for other opportunities - there are always competing opportunities for my investment dollars.

My goal is a net 15% annual rate of return achieved through dividends, income, capital gains (realized and unrealized). This will allow me to achieve all of my financial goals yet not be so lofty that I imbibe huge risk.

One day I will share my checklist which includes macro and micro economic points, sector analysis …. but now is not the time to sell solid investments.

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