When people talk about their investing successes, the focus is usually on their greatest buy decisions – the stocks they picked, when they bought them, the price they paid, etc.
However, talking only about what you bought is like telling a story without an ending. No investment is completely successful until you've locked in a gain by selling it. On a total portfolio level, reducing stock exposure from time to time can be just as important as how much you have in the market.
Having a sound exit strategy is often a neglected part of how people approach investing. It can involve when to sell a particular stock, when to cut back on your allocation to stocks in general or even getting out of the market altogether for a while.
There are several ways to approach an exit strategy, and having one or more of these in place is an essential part of investing.
Keep reading with All-Access
Get a wealth of educational content and powerful investing tools backed by a quarter century of research.
