When to think about selling stocks: A simple guide

Most people know how to get started with investing. But fewer people talk about when to sell stocks. Making a plan ahead of time can help you stay calm and make smart decisions, especially during big life changes or when the stock market is fluctuating significantly. 

Having a plan helps you make smart choices

When you have your life savings—or at least, your hard-earned money—invested in the stock market, it’s easy to let emotions take over when the value of your portfolio changes, either up or down. If the stock market starts dropping rapidly, you might be tempted to sell prematurely, even if this isn’t the best decision for your long-term goals. On the flip side, you may decide against selling when your investments are doing exceptionally well, even if it would be beneficial to do so. 

Note: This guide should not be taken as financial advice, as each family’s circumstances are unique. But you may find these ideas helpful considerations as you navigate financial plans over time. 

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Common reasons families might sell stocks

There are countless reasons why people may sell their stocks. Here are a few of the most common ones. 

Something changes at the company

By owning a stock, you own a piece of the company, so if something changes at the company, you may want to reevaluate whether you want to remain invested or if it’s time to sell. Changes come in many forms, such as new leadership, purchasing or selling a business line, changing products, or bad news that affects the perception of the company. If you bought shares in the company because you felt optimistic about its long-term prospects, decide if these changes affect your opinion of the company going forward.

The price has dropped significantly

This is often the biggest reason people sell a stock, and more often than not, it is an emotional decision. To avoid this, consider setting rules for when to decide to sell. For example, you may decide to sell a stock when it drops 10% from your purchase price, removing all emotion from the equation. 

The stock has gone way up

Counterintuitively, many investors decide to sell a stock when it has increased significantly in value. Stocks don’t go up forever, and investors often mistakenly assume that they will, especially when momentum is on their side. You may decide to sell a stock when its price reaches a certain level, whether that means selling all of your shares or a certain percentage. This allows you to “lock in” your profits before the stock goes back down and reinvest your gains into different stocks. 

Family money needs have changed

You may decide to sell stocks to use for a life event, such as a vacation or paying for education costs, or to reallocate to different investments as your needs change. For example, as you get closer to retirement, you may decide to be more conservative with your investments, so you sell some stocks to buy bonds. Families may also decide to sell stocks due to financial hardship, such as losing a job for an extended period of time or undergoing medical treatments, so they have access to money during these times. 

Times when selling may not be the best idea

When considering the above scenarios, you may also want to consider that selling may not be the best idea. A few things to consider:

• When your stock goes up, you don’t necessarily need to sell immediately to lock in profits. If you have done your research and feel confident that the stock has room to continue to run, then you may decide to stay invested, even if others are selling. 

• When there’s scary news: The news often highlights negativity surrounding events or the stock market, so be mindful of this when making your investment decisions. Throughout the stock market’s history, there have always been negative events, but that doesn’t mean you should always sell. 

• When you have a long-term plan: The stock market can go up and down in the short term, but over time, it has usually grown. That’s why it’s important to stick with your plan, even when the news sounds scary or the market dips. If your goals haven’t changed, a short-term event usually isn’t a reason to sell. Solid plans are meant to weather ups and downs, so consider only making big changes if your goals change, too.

How Greenlight can help your family learn about investing

With the Greenlight app©, families can learn about investing together. With a library of educational content and parental tools, kids can research stocks, propose trades, and parents can review before approving. It’s a simple way to build good money habits and open up family conversations about wise investing strategies, like when to hold or sell a stock.

It’s okay to ask questions

Every situation is different, and the decision to invest, hold, or sell your investments can be a big one. Normalize talking about these decisions with your family, so everyone is informed and feels comfortable. For the most important financial decisions, you may benefit from consulting a financial advisor to get professional help. 

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© 2025 Greenlight Investment Advisors, LLC, an SEC Registered Investment Advisor provides investment advisory services to its clients. Investing involves risk and may include the loss of principal. Investments are not FDIC-insured, are not a deposit, and may lose value.