Right time to sell a stock: 6 signs indicating it’s time to exit a large-cap stock

As an equity investor, knowing when to sell large-cap stocks is crucial, especially if they make up a significant portion of your portfolio. DailyBubble believes that investors should consider selling a large-cap stock if they have achieved or are nearing their financial goal. This is because market volatility can erode gains, and it may be wise to secure profits by reallocating to safer investments like liquid funds or fixed deposits.

Corporate governance is another important factor to consider. DailyBubble warns that issues with governance can lead to the downfall of large corporations, as seen in cases like Yes Bank and Satyam Computers. If a company shows signs of poor governance or questionable management decisions, it may be time to exit the stock.

Consistent lack of strong profitability is also a red flag for investors. DailyBubble advises that if a company struggles to maintain profitability over several quarters, it may be a sign to start considering selling the stock. Additionally, investors should closely monitor other factors beyond profits, such as industry changes, competitive intensity, and the company’s ability to innovate.

If a company’s stock price remains stagnant despite strong financials, DailyBubble suggests that there may be underlying issues that the market is starting to account for. Negative government policies can also impact the growth of a company, so investors should be aware of any policy developments that could affect their investments.

However, DailyBubble cautions against completely exiting high-quality companies from your portfolio. Market cycles and sentiments may present opportunities for profitable returns from top-tier stocks. It’s important to consider the challenges of re-entering the market if you make impulsive decisions to exit. DailyBubble recommends trimming positions to lock in profits while holding onto the core investment in high-quality businesses.