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Investing Specialists

Maybe You Should Sell Some Stocks

Not everyone should sit still despite the market's turbulence.

When stocks were having an especially rough go of it in early January, one of my friends asked, "Should I make any changes to my investments in this crazy market?" Before I could answer, she corrected herself. "I know, I know. You're going to tell me not to sell. Everyone says not to sell."

There's a laundry list of good reasons why not selling stocks in periods of market stress has become conventional wisdom. Emotion--specifically, fear--could be clouding your judgment. And if you have a long time horizon, you should be a buyer of stocks when they're down, not a seller. Far too many investors have exhibited a tendency to reduce their equity exposure at the tail end of a bear market; when stocks rebound, they're on the outside looking in. And all-or-nothing market shifts--you're all-in on stocks one day, all-out the next--are conducive to poor investment results.

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