Sell Shares: Factors to Consider for Profit Booking

  1. Fundamental Analysis
    1. fundamental analysis Tools and Skills for smart Investing
    2. What is compound interest in investment with examples
    3. Long term investment Tips for qualitative and quantitative analysis
    4. “Annual Report Explained Understanding Company Financials and Insights “
    5. Financial Statements Guide to Understanding Profit and Loss, Balance Sheets, and Cash Flow
    6. Understanding financial statements from two different angles
    7. Profit and Loss Statement How to understand Revenue Figures and Other Key Metrics for smart Investment Decisions
    8. Understanding Profit and Loss Statement Statement Profit before tax Net Profit after tax with examples
    9. Balance Sheet Definition and Examples
    10. liability Understanding 3 types of liabilities with examples
    11. Asset Understanding types of Assets in Balance Sheet
    12. Cash Flow Statement How to Read and Understand with examples
    13. Everything about Cash Flow Statement and Financial Statement
    14. Financial Ratio An analysis of the 4 types of ratios
    15. EBITDA understanding margin formula with examples
    16. Leverage Ratio 4 types of ratios and how to calculate with formula
    17. “Operating Ratio 7 types of ratios and how to calculate with the formula and examples “
    18. 3 valuation ratios Price to Sales (P/S), Price to Book Value (P/BV) and Price to Earnings (P/E) analysis with formula
    19. How to Pick a Share Basic Best Practices for New Investors with checklist
    20. Equity Research Guide to Evaluating Share Investment Potential with checklist
    21. Discounted Cash Flow technique The Key to Evaluating Share Prices and Maximizing Investment Returns
    22. DCF Analysis A Step-by-Step Guide to Valuing Shares like a Pro with examples
    23. NPV Net Present Value What does it mean with examples
    24. When to Sell a Share A Guide to Maximizing Profits and Protecting Your Portfolio
    25. Current Assets and Noncurrent Assets: What id the Difference with examples
    26. Return on Equity ROE What It Means and How to Calculate
    27. ROE, ROA, and ROCE How to calculate with examples
    28. asset turnover ratio Definition and Understanding the Impact
    29. Inventory Turnover Ratio What It Is, How It Works and how to calculate
    30. pe ratio Understanding Price Earning Ratio to Assess a Shares
    31. economic moat Advantage  in business
    32. Equity Research Step-by-Step Checklist for Analysing Company Performance
    33. Financial Health – Definition, Determinants, How to calculate
    34. Time Value of Money Understanding and Calculating Future and Present Value
    35. Sell Shares: Factors to Consider for Profit Booking
Marketopedia / Fundamental Analysis / Sell Shares: Factors to Consider for Profit Booking

Throughout the module, we’ve looked into purchasing stocks. Now let’s talk about selling – more specifically when to book a profit. Let’s say you bought ARBL at around Rs.250 per share, and it is now trading near Rs.730/- per share- an absolute return of 192%, an exceptional accomplishment over the course of a year. So, should you sell out this stock? Well, whether or not to sell must consider any disruptions in investible grade attributes.

We must not purchase ARBL simply because it has dropped by 15%. The purchase of the stock should be based purely on its “investible grade attributes”, and if those are not demonstrated, we do not buy. Consequently, we keep stocks for so long as the investible grade attributes remain intact.

The company can go on exhibiting its assets for a long time. The point is, as long as these assets remain in good condition, we will retain our investment in the stock. Consequently, this will lead to a rise the stock price and generate wealth for you. When there are signs of any weakening of these resources, one can think of selling off the stock.

– How many stocks are in the portfolio?

The amount of stocks that you keep within your investment portfolio can often be a topic of discussion. Holding numerous stocks will let you spread out potential dangers, while others suggest fewer investments that concentrate on one sector can bring more profit. Here is what some of the most respected investors have said in terms of how many stocks to include:

Seth Klarman – 10 to 15 stocks

Warren Buffet – 5 to 10 stocks

Ben Graham – 10 to 30 stocks

John Keynes – 2 to 3 stocks

I own 13 stocks in my portfolio and feel confident in staying under 15. It’s hard to dictate a minimum number, but I believe more than 20 stocks would be too many for an individual portfolio.