When should I sell a stock?
When the reason you bought it no longer holds, when it has grown to an uncomfortably large share of your portfolio, or when you need the money. A price drop by itself is not a reason.
The best answer comes from the reason you bought. If you bought because the company was growing sales 20 percent a year and it has now stalled for two years, the thesis broke; that is a sell signal. If you bought for the same reason and the stock has fallen 25 percent on a bad market while the business keeps growing, nothing changed except the price, and price alone is a weak reason.
Portfolio size is a second legitimate reason. If one stock has done so well that it is now 30 percent of everything you own, trimming it is sensible even if you still love the company. A single position that large means one bad quarter can undo years of progress elsewhere.
The third is simply needing the money for something in your life. That is what it is for. Selling to fund a house deposit is not a failure of discipline; it is the plan working.
The reasons that consistently cost people money: selling because it dropped and it hurts, selling because it rose and you want to "lock in gains," and selling because a headline scared you. Each of those replaces a plan with a feeling.
Informational only, not financial advice. Updated September 4, 2026.
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