Advice offered by Marc Hebert, president of The Harbor Group Inc., a certified financial planner. If you have any questions about finance or if you’d like to suggest a future topic, email [email protected] successfully manage a portfolio, an investor has two types of decisions to make: When to buy an investment and when to sell it. Often, our emotions get in the way. Examples include holding an investment too long, thus allowing losses to accumulate, as well as selling too soon and missing out on some gains. To help avoid these defeating behaviors, here are some suggestions for deciding when it is time to sell.Exit Strategies Decide in advance just how far a security’s market price should be permitted to move up or down before it is sold. The maximum upside is the trigger for selling in order to take gains. The maximum downside is the threshold that can be used to limit losses or protect what profits you may already have for the investment. This range can be adjusted as a stock price rises over time. Rebalancing your portfolio back to the asset allocation you have chosen may force you to take some investment gains off the table. Maybe due to market movements you are overly concentrated in one asset class and it is time to sell part of an investment to get to the percentage of your portfolio you had originally chosen for the position. It is a good idea to review rebalancing your portfolio periodically. Rebalancing is a chance to monitor your portfolio allocation and which investments are outside of the targets you have set. Some investors rebalance semi-annually or annually. Be aware that rebalancing too often can increase trading costs. Maybe your original investment plan no longer fits your goals. For example, retirement is coming soon and you would like a more conservative portfolio. In this case, you might decide it is time to sell some of your risker positions, such as stocks, and buy safer assets, such as bonds. There might be investments available that better meet your…

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