Selling stocks in the fall: timing and tactics for a smart investment strategy

As the lazy summer months come to an end, it’s normal for investors to start looking over their stock portfolios. Fall marks a period of change, not only in nature but also in the financial markets. Selling shares to free up some liquid assets is sensible as it gives investors room to improve their portfolios and move on to a new strategy in this transitionary period. However, timing and approach are key to assuring your choices are well informed and work in your favor.

What happens in the markets in fall

Fall brings a particular dynamic that can impact the timing and tactics for selling stocks. Understanding these trends is crucial for making educated calls. Here are some factors to be aware of that affect the flow of the market in fall:

Earnings season

Fall is earnings season — the time when public companies typically release financials from the previous quarter. These reports can really have a huge impact on stock prices, whether for good or for bad. Investors should keep a close eye on these earnings announcements as they’ll give valuable insight into the health and potential of the companies in their portfolio.

Tax considerations

Selling stocks in the fall can influence your tax situation. Investors need to be aware of possible capital gains taxes from selling off profitable investments. Consulting with a tax advisor is a good move to help navigate the tax implications of your sells.

Market volatility

Fall is a volatile time for the stock market. There are a number of factors that drive it — politics, economic news, even simple market sentiment. This volatility can create chances for savvy investors to make some cash, but there’s a high risk behind any sale. It’s important to have a solid game plan when it comes to this time of year.

Timing matters

Timing is critical when selling stocks in the fall. Even the most experienced investors can have a hard time telling what the market is going to do. There’s a lot of strategies that you can think about while making sales, and we’ve gone over a few of the most important ones below.

Take stock of your portfolio

The absolute first step is to make a good assessment of the stocks you currently own. There are bound to be stocks in your portfolio that haven’t been performing as well as you expected — fall is a good time to let go of these flops. Try to strategize your long-term goals. Look at how you can rebalance your portfolio to strike a better balance for the future.

Watch the earnings reports

Earnings reports are a bible for investors at this time of year, especially for companies that are already represented in your portfolio. Exceptional earnings can send the stock price up, but disappointing results can trigger a mass sell-off. It’s a good idea to shed your stocks in companies that have consistently weak earnings reports, and doing this early can help you make the most of a bleak outlook before prices really drop.

Consider tax-loss harvesting

Tax-loss harvesting is a great tool for investors looking to sell some of their portfolio. If you own stocks with unrealized losses, fall is an opportune time to shift them. The sale will offset any capital gains tax and potentially lower your tax liability. Tax considerations shouldn’t be the primary driver in your investment decisions, but once you’ve acted on your primary focus of overall health and potential of investments, it’s definitely an area to weigh up.

Keep an eye on market sentiment

Market psychology has an incredibly strong role in short-term price movements, and it’ll come into play strongly in the changing season. If there’s a black cloud brewing over the market sentiment around a sector, or even if it’s getting a little exuberant, it can signal a time to adjust your investments accordingly.

Be sure to diversify and rebalance

While you’re already shifting stocks, it’s important to review the diversification and balance in your portfolio. Diversification is key for smart investment, so take the time to rebalance your portfolio by selling successful assets and investigating new and underrepresented opportunities to keep a good balance.

Tactics for smart selling

It’s one thing to get your timing down when it comes to selling stocks but going in without a game plan is a recipe for disaster. The next thing to look at this fall is the tenets of smart selling. Interestingly enough, a lot of these align with the best tactics for casino games, looking at keen risk management and rigorous discipline to maximize winnings. Investors could do well with some practice of the techniques below, trying out slot games like Sakura Fortune before taking the plunge on their high-risk portfolios.

Set clear goals

Before selling anything, establish clear goals on what you want to achieve this season. Know exactly why you’re selling, whether it’s to reduce risk, take profits or simply rebalance your portfolio. Having a clear goal in mind will guide your decision-making process.

Use stop-loss orders

Stop-loss orders are key to protect your investments from big losses. Putting these in place will automatically sell a specified stock if its price sinks too low. While they don’t guarantee the best price by any means, they work wonders at limiting losses when the market gets rocky.

Dollar-cost averaging

Instead of selling all your stocks at once, consider spreading the sale out over time. If you sell some intermittently, it will smooth out the impact of ups and downs in the market, and reduce the chances of a bad sale price.

Limit emotional decision-making

High emotions can really mess with your judgement when it comes to selling stocks. Fear and greed can lead to rushed decisions that don’t match with your long-term goals. Stick to that initial plan and monitor your own emotions closely when it comes to any choices outside of it.

Monitor fees and costs

Selling stocks is not free of costs — broker commissions and taxes can add up quickly, and it’s important to keep these to a minimum to maximize your returns. Consider using low-fee broker platforms and tax-efficient strategies.

Stay informed

The final and most essential tip on smart selling is being informed. It’s useless trying to conquer the market if you don’t have the first idea about the companies in your portfolio and the broader market conditions. Do your research and review your investments to ensure they still match your goals.