When to Sell Stocks? There Are Only 3 Good Reasons, and the Price Isn't One (Explained by a Banker)

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When to Sell Stocks: The Only Three Good Reasons

For a long-term investor there are three defensible reasons to sell, and the price on the screen is not one of them. One: a rebalancing band has broken, so a written rule requires a trade back to the target split — Norway's Government Pension Fund Global does exactly this, rebalancing when its benchmark's equity share deviates by more than 2 percentage points from a 70% target, checked on the last trading day of the month. Two: the life the money was for has changed, and the date you need it has moved closer. Three: for an individual holding, the reason you bought it no longer exists. Everything else is timing, and timing is expensive: J.P. Morgan's Guide to Retirement 2026 shows $10,000 in the S&P 500 Total Return Index growing to $80,619 between 2 January 2006 and 31 December 2025 if left alone, $35,866 if the 10 best days were missed, and $9,462 — less than the money put in — if 40 were missed, because six of the 10 best days fell within two weeks of the 10 worst.

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