The Key Selling Points

The Key Selling Points

1. Rebalance your portfolio at fixed intervals (i.e., every months, every quarter, every year), selling stocks that no longer meet the fundamental criteria you used to buy them in the first place. Replace them with new stocks that do meet your criteria.

2. Sell stocks immediately if they are involved in accounting or earnings scandals, or if they become a major bankruptcy concern. In these cases, do not wait until your net rebancing date to sell.

3. For tax reasons, it's generally best to sell winning positions after you've held them for a year and losing positions before you've held them for a year. If a stock you've made money no longer meets your investment criteria and you've held it for close to a year, consider holding it until you pass that one-year mark to limit taxes.

4. Don't be discouraged when your system calls for you to lock in losses on a stock; not even the best investors in the world are right all the time.