Trying to figure out when to sell Apple stock (Nasdaq: AAPL), particularly given its spectacular performance over the past several years, is a major dilemma.
If you're long on AAPL, you're no doubt trying to sort through a lot of conflicting signals.
With AAPL down about 16% from its high of $702.10 on Sept. 19 amid a wave of negative news, some financial pundits are calling a top and urging Apple investors to sell Apple stock.
Trouble is, they've done this many times before during Apple's long climb. Sometimes it's after AAPL hits a new high, and sometimes (like we're seeing now) it's after the stock dips in reaction to some bad news.
But investors who opted to sell Apple stock in years past lived to regret it.
Back in 2010, for example, when AAPL breached the $300 mark, plenty of bears urged shareholders to rush for the exits.
Any who followed that advice missed out on a 100% gain.
At the same time, Apple stock can't keep rising forever. No company can maintain the sort of exponential growth necessary to fuel the kind of gains Apple has enjoyed over the past few years.
But the big question is when this will happen. Now? Next quarter? Next year? 2015?
And as if that weren't enough to make an Apple investor's head spin, there's the added stress of volatility.
From late November to early April, AAPL soared $270, an astounding 75% increase in just four and a half months. Then it fell $100 in the next five weeks.
With turbulence like that, retail investors easily can get heartburn trying to figure out when to sell Apple stock.
That's why we put together some guidance.
If those dispensing investing advice were really honest about it, they'd admit they almost never know exactly when to sell a stock.
Professional investors know this, and instead use an array of strategies and tools to maximize profits while minimizing losses.
Such tools are useful with any stock investment, but especially so in the case of Apple, given the stock's huge increase in price and the cacophony of conflicting opinion.
"Never ride a big winner into a loser," said William Patalon III, Executive Editor of Money Morning and Private Briefing, noting a common mistake many investors make - waiting too long to sell.
Instead of stewing over exactly when to sell Apple stock, or any other stock for that matter, Patalon suggested investors try some of these strategies:
While such approaches mean investors forfeit any chance of getting the maximum profit by selling at the highest price, Patalon said that happens only very rarely anyway.
"It reminds me of an old saying: you'll never buy at the very bottom and you'll never sell at the very top," Patalon said. "It's better just to take what the market gives you."
Bill Patalon dishes out nuggets of investing wisdom five days a week to the subscribers of his Private Briefing service. To learn more about that service, and learn how to gain access to his free investor reports, click here.
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