Bangalore: “You talked about the importance of taking small losses before they magnify into bigger losses,” a reader of The Safal Niveshak Post asked me recently. “But how do I know which stocks to sell to takes such losses? Is that so simple?”

“No, it isn’t,” I must say.

Knowing when to sell a stock or which stock to sell isn’t as easy a decision as knowing when to buy a stock.

In fact, most discussions on investing revolve only around when to buy a stock.

“Which stock should I buy?” is the first question that comes to your mind when you think about your investment.

But an equally important question is – “Which stock should I sell?”

Well, the answer to this question is often as difficult and individual as deciding when to buy a stock.

Philip Fisher, in his seminal book ‘Common Stocks and Uncommon Profits’ wrote, “If the job has been correctly done when a common stock is purchased, the time to sell it is – almost never.”

But then, there are times when the job is not done correctly and we realize later that the stock purchase was a mistake. It is then that a stock must be sold.