Before selling your stocks...

Be sure you're selling for the right reasons. If you're selling because you've made a tidy profit, that's all well and good, but selling at a loss becomes a trickier situation.

A sudden market drop is almost never a good reason. The stock market can be volatile — thanks to panicking investors — so pulling out your trade position when things get rocky will only cement your losses.

To free up liquid cash, consider exploring other options first.

If you end up considering a sale either way, take a closer look at the company behind the specific stock. Weigh strategy, caliber of CEO, market realities (is it a dying industry?), long-term revenue (or revenue decline) and so on before making your decision.

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When selling your stocks

When you’ve decided to sell your stocks, here are the steps you'll need to take.

1. Choose your order type

Order types manipulate the timing of sales. By choosing the correct order type for your sale, the goal is to minimize losses and maximize gains.

Order Type Description When to Use Risks
Market Order A request to buy or sell stock at the best available price Unload your stock at any price The stock could sell at any given price without any restrictions
Limit Order Keep the stock if you can’t sell it at or above your price Unload your stock at the specified price or better The stock may never sell if it doesn’t reach your price
Stop (Stop-Loss) Order A market order that only occurs when stock reaches your price point Sell stock if it drops below a specific price The stock may sell for less than the stop-loss price. Temporary drops may sell the stock when you don’t want to sell.
Stop-Limit Order An order executed if the stock drops to the stop price, but only if it can unload at the set limit price or better. To sell stock if it drops to a specific price, but only within the minimums you've set Your stock may not sell if it drops below the stop triggering price too quickly.

2. Fill out the trade ticket

If you’re selling stock through a broker, you must use a trade ticket to start the sale on the website or platform. Most sales settle up to two business days after the date of the order.

It’s easy to complete a trade ticket. Select "sell", enter the company's ticker and how many shares you’re selling, the order type, a stop price and limit price if applicable, and how long your trade should be open for (known as the time-in-force).

You have several choices for the time-in-force. The most common options are as follows:

Time-In-Force Option Description
Day Trades cancel and orders expire if they are not filled by market close. This is usually the default option.
Good-Til-Cancelled Trades remain active until they are either filled or cancelled. Brokers tend to limit how long a Good-Til-Cancelled can remain open.
Fill-Or-Kill Used when trading a lot of shares. Trades are cancelled if the entire order is not filled.
Immediate-Or-Cancel Orders must be filled immediately. The order is cancelled if not.
On The Open Fills at market opening price.
On The Close Fills at market closing price.

With most trades, you'll want to leave the default ‘Day’ option. You can explore the other options as you become more familiar with trading stocks.

Once you’ve completed the trade ticket, make sure you check it over to ensure all the information is correct before submitting — you don’t want to be selling the wrong one at a less than desirable price.

How to sell your stocks

Note that regardless of how you choose to sell, you're constrained to the regular trading hours of stock exchanges (typically between 9:30 a.m. to 4 p.m EST).

1. Through your brokerage

Selling your stocks directly through your brokerage is probably your safest bet to dump shares the quickest.

Whether you use a traditional brokerage or an investment app, you're probably going to be able to easily access your portfolio online or through your cell phone when you're ready to sell.

Keep in mind that traditional brokerages always charge a sales commission every time you buy or sell stocks, whereas trading is often done free of charge on investing apps.

2. Team up with a financial advisor

If you're already working with a financial advisor to manage your portfolio, you can reach out to them to make sales on your behalf. Usually your advisor will sell stocks within 24 hours under your instruction but overall can take longer than if you were to sell on your own.

Make sure to always speak with your advisor directly or request the trade in writing. It's best not to send an email or leave a voicemail requesting the trade as those can be missed.

It can be difficult to entrust another person with your wealth, so if you're recruiting financial advisors for help make sure they're a fidicuary — meaning they're legally obligated to put your interests ahead of everything else.

Nowadays you can even get in touch with fiduciary financial advisers online.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Alex Denholm

Alex Denholm

Freelance Contributor

Alex Denholm was a freelance contributor to MoneyWise.

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