When should I sell a stock that is doing well?

This question remains one of the most frequently asked questions by investors. Determining when to sell a winning stock requires a lot of things. A lot of people would say the best time to sell a winning stock is when the price of the stock is picking; others would tell you not to be swift in selling a stock that is doing well. I think the best time lies in how much profit an individual is projecting to make.

While making a profit is one of the major objectives of the business, I think the best time is when it seems everybody's attention is on the stock. At this point, a lot of people will also want to sell their stocks, and when you have abundant stocks in the market, the price begins to drop. Also, if you want to make maximum use of winning stock, you can sell 50% of it when the price is still up and wait till you start suspecting a possible drop in the price.

Ever heard the idiom, “There is an exception to every rule?” The same idiom applies to the question of when you should sell a stock that is doing well. One very popular sell rule is called an offensive rule, which means to sell some or all of your stock when it has risen 20 to 25 percent.

This rule is based on the historical fact that this is the point when most stock rallies will peak. But, there are exceptions to this rule. There are also some people who think you should sell at stock if you don’t understand the company or if you have too much money invested in stocks.