WHEN TO SELL A STOCK? | Investing For Complete Beginners

When should I hit sell? This is a common beginner investing question. Welcome back to Joy Yang's Investing for Complete Beginners series. If you're new here, I'm Joy Yang, a 26-year-old investor with six figures in assets. At 23 years old, I cashed out my entire investment portfolio to buy my first property in Ontario. In this video, I'll be sharing five simple yet effective methods to help you decide when to sell your investments. I like to invest like a beginner and it still works very well for me, so you can always expect to learn realistic and straightforward methods in my beginner investing series. Let's start with something most beginner investors never think about. One, when a CEO becomes too political or unpredictable. This is something I personally pay attention to because as someone who wants to invest long term, I don't want to hold stocks that are consistently fluctuating up and down due to political drama. When the CEO of a company becomes too political or unpredictable, it's a sign for me to reconsider holding that stock. Why? Because the CEO is the face of the company. When they act out, say the wrong things, or get involved in political controversies, it affects how investors feel and that impacts the stock price. A lot of beginner investors don't realize this, but when you buy a stock, you're actually buying a small piece of a real company. I used to miss that too. Back when I started, stocks just felt like numbers on an app. I didn't think about the fact that there were real people running these businesses, making decisions, leading teams, and representing the brand. I definitely wasn't checking what the CEO was saying in public, but over time I learned that those things do matter because the way a CEO acts, especially in public, can actually affect the performance of the stock you're holding. Think about Elon Musk and Tesla or Mark Zuckerberg and There have been times when a single tweet, comment, or headline caused the stock to go up or down drastically. Now I'm not saying they're bad CEOs. Clearly they know how to build huge companies, but I personally prefer steady leadership over unpredictability. You don't even need to be reading financial news every day to catch these red flags. If you follow finance creators on Instagram or YouTube, you'll probably notice when a CEO starts making headlines for the wrong reasons. You can always count on your content creators to update you on these things. Or if you're on Blossom, which is my favorite free social media platform for investors, we have thousands of real investors actively posting updates about the companies they're holding or selling. If something big happens, you'll see people posting about it there too. You'll get exposed to what other investors are thinking and why. On a side note, you can also join Blossom today for free and follow me there to see all the stocks and ETFs that I'm holding right now. And you'll get notified whenever I buy or sell a stock. So when I start seeing too many posts or videos about a company's CEO causing chaos, I take it seriously and I'll consider selling my position because I don't want my portfolio to swing around based on one person's behavior. I like stress-free investing, so if you're a beginner, here's a simple rule for you to keep in mind. When the leadership of a company starts becoming the story instead of the company's growth or performance, it's time to re-evaluate. Two, when a company cuts its dividend. This is one of the clearest signs for me as a dividend investor. When a company cuts its dividend, the stock is on my sell radar. Dividends are what a company pays you just for buying and holding their stock. Since you're a part owner of the company, you get a part of the profits. When a company suddenly cuts or stops paying those dividends, it usually signals to me that they're not doing so well financially. A steady dividend means the company is confident in its future and believes that they'll continue to be profitable. So when they cut their dividends, not only does it signal financial trouble, it also kind of signals mismanagement. It could be that the revenue is shrinking, they're not making as much money as they used to, or maybe they miscalculated how much cash they could actually afford to give out. Either way, it shows they didn't plan things well. In some cases, they're dealing with higher costs, too much debt, or a business that's just not growing anymore and they need to hold on to that cash to stay afloat. Also, companies know that investors love dividends, so when they cut it, it's usually a last resort and it sends a pretty loud message. We're not doing so great right now. That's why I take dividend cuts super seriously. Some people say dividend cuts are the first sign of financial trouble. I say it's the last. Like I said before, companies know investors love their dividends and when they do decide to cut it, it's often the last resort. For an example, BCE or Bell laid off a ton of their employees before they cut their dividends. And while some stocks do bounce back, I'd rather move my money into a business that's still strong and steady. If you also want to learn how to build a portfolio that prioritizes dividend income, comment the word dividend down below and I'll send you a detailed dividend investing tutorial. Three, when new competition threatens the company. Another important reason I consider selling a company is when I see a newer, more innovative company starting to disrupt the one I'm holding, which is called the emerging competitor. You don't need to be an expert to notice this. You just need to stay a little curious and pay attention to what people around you are using or talking about more. Let's think about how Amazon disrupted so many retail companies like Bed Bath & Beyond and Sears. These are companies that once dominated in their space, but they didn't innovate fast enough. Now they're either gone or struggling. Another example is Barnes & Noble. It used to be a major bookstore chain. The rise of Amazon provides consumers with faster delivery, better pricing, and access to e-books. So as you can see on their stock chart, this company has been losing its market value in the last decade. If you're invested in a company that's starting to look outdated or clearly getting overtaken by newer businesses with better technology or stronger branding, don't panic sell. There are three simple questions that can help you decide if you should cut the investment or not. One, is this company doing anything to stay relevant? Are they adapting to new consumer habits? Do they have a plan to compete? So do your research and try to answer these three questions. Nowadays you can just simply ask ChachiBT to help you research or post a question on Blossom and let other investors help you. Investing in individual companies comes with the risk of emerging competition. That's why I'd rather put my money in an ETF that gives me broader exposure without relying on one company's future. This is especially true in fast-moving industries like tech and retail. Things change quickly and companies that don't adapt often fall behind. As a long-term investor, I prefer to let the fund managers do the work for me. ETFs such as SPY, VFV, or QQQ will automatically update the companies they hold based on performance. So if a company starts falling behind, these ETFs will naturally reduce their exposure to it or remove it entirely. That's why I always recommend beginners. If you're not actively researching your stocks, you're better off with a broad market ETF. It gives you peace of mind and you're still benefiting from growth across the strongest companies. If you want to know what ETFs I'm buying, make sure to subscribe because my investing tutorials will come to you when you Four, when you actually need the money for a real goal. Let's be real, investing is amazing, but the whole point of building wealth is to actually use the money one day. So one of the very few times I've ever sold my investments was at 23 years old when I used the cash to buy my first rental property, an apartment in Markham, Ontario. That was a huge rewarding moment for me. I had been investing consistently in my TFSA since I was 19. My strategy was slow, steady, and mostly focused on divot, reinvesting, and compound interest. Over time, my portfolio grew to an amount that was enough for me to put toward a down payment. So it is important to have a clear financial goal as an investor. If you're saving to buy a house, go back to school, or start a business and your portfolio has grown enough to help you do that, it's okay to take profits and use the money. Know what you are investing for and don't be afraid to sell when you have reached your goal. You're not investing just to stare at green numbers on a screen. You're investing to improve your life. Number five, when it's time to rebalance your portfolio. The last method to know when you need to sell is a traditional investing concept called portfolio rebalancing. Rebalancing might sound like a fancy investing word but don't worry, let me make it simple for you to understand. Let's say you decide you want 60% of your portfolio in ETFs and 40% in individual dividend stocks. But after a few months, your dividend stocks grew way faster than expected and now they make up 55% of your portfolio. That means your portfolio is no longer balanced the way you intended. If a certain type of investment in your portfolio grows much faster than the others, it might suddenly carry more risk than you planned. So what do you do? You rebalance. That could mean selling a small portion of your dividend stocks and putting that money back into ETFs to restore your original balance. Some investors though prefer to categorize their portfolio according to the industries or sectors. So let's say your goal is to maintain 40% tech, 30% energy, and another 30% on healthcare. You can also apply the same concept of rebalancing. But here's my personal tip. Don't be too strict on maintaining your ideal portfolio distribution. You don't need to hit your ideal percentages all the time. You only set those percentages as a reminder of your ideal investing plan. I like to do a detailed portfolio categorization and calculate how I distribute my capital once every three to six months. Not too often, just enough to make sure I'm not drifting too far from my investing strategy. I would also consider to potentially rebalance your portfolio when the stock moves up or down significantly. For example, recently the stock market has been fluctuating aggressively due to tariffs. So this is a good time to rebalance your portfolio if you haven't done so in a while. If you found these five simple methods helpful, don't forget to drop a like on this video and hit subscribe. Are there any other methods you use to decide when to sell your investments? Feel free to share them in the comment section. And if you have been taking notes, you can also post a story and tag me on Instagram. I'd love to reshare it. Thank you so much for learning with me today. You can click this video over here to learn about the top three ETFs that I'm buying. See you in the next video.