6. A Better Opportunity Comes Along

Another way to avoid complacency is to continually study the Opportunity Cost of your investment. This is the sacrifice you make when other alternatives are not picked up. Always compare the earnings or appreciation of your stock or fund with the potential gains from another stock. As an example, a reason to sell can be when a different type of investment offers better tax benefits.

7. You Made a Mistake

It may seem unnecessary to mention selling when investing mistakes are made, but some people are hesitant to admit to themselves when they are wrong and continue with the investment hoping things will turn around. Misunderstood fundamental numbers and ratios can lead to lapses of judgment.

With the increasing reliance on tips from friends and strangers, any of which could be wrong, it is prudent to admit mistakes and dump the investment before it becomes a drag on the portfolio.