MONEY MATTERS : ON STOCKS - SHOULD WE SELL AT TARGET PRICES?

Will you hit the SELL button?

 I was having a conversation with a good friend about selling at target prices earlier. Each stock has a target price. If stock ABC hits Php 400.00 then, you should sell. Target price in this case is Php 400. Simple. Hmm...

Firstly, WHERE do we get target prices?  You may join Bo Sanchez' Truly Rich Club for a fee (click HERE). Or if you are using COL Financial as your online stock broker, you have an access to their Streetsmart database where all Target Prices are listed.  

In case you're wondering how to get started with COL, click HERE.

Going back on our opening spiel: Is it REALLY simple, huh?

I guess it's not that simple when "emotions" come into play. 

I'll sell it. Ugh. But what if it goes higher?

"Ako ang iyong konsiyensya. Don't be greedy!"

 I'll wait for the price to rise higher. 

"Good things come to those who wait. 

Ako ulit ang iyong konsiyensya!"

For someone who's new on stock market,

 the answer does not come by so easily.

I suggest 3 options, if you allow me to.

 OPTION 1: SELL EVERYTHING

If you are relying on the recommendation of analysts {of your choice}, then it should be pretty straight forward. In fairness, it really pays NOT to be greedy. Numbers are provided by a competent person so who are we to argue? Yes, prices may continue to go up. BUT, prices may also go down. So to save yourself from stress and regret, do sell everything. After all, the stock analysts know better. 

 OPTION 2: HOLD EVERYTHING

Entire opposite of our first option. Well, it's too judgmental of us to tag people as greedy just because they hold on to a specific stock regardless of the SELL flag. Factors like good fundamentals (potential earnings) of a stock can be a deal breaker. Case in point: Meralco has an undoubtedly good track record (just look at your billing statement, teehee) so to hold on to this stock may be a good thing 3, 6, 12 months down the road.

OPTION 3: SELL A PORTION OF YOUR GAIN

Some view this as the 'safest option'. Say you bought your stocks at Php 20,000 then the total price today climbed up to Php 25,000, you'll only to sell a portion of your shares worth Php 5,000. That's possible! By doing this, you already bagged your gains while still holding on to your original investment. While this seems the best option, note that you're still exposed to a risk {everybody in the market is}, but at least you've realized a portion.

At the end of the day, it's still you're decision if you'll employ Option 1, 2 or 3. I think what's important is we invest in stocks with GOOD FUNDAMENTALS (blue chip) so we're safe {more or less}. Most of all, before making any decision, I suggest a good old fashioned way of... *drum rolls please* PRAYING TO THE LORD. I know it's a cliche but it's better to have our BIG BOSS' green-signal on whatever our plans are.  -CMK