When to book profits with shares

 "Hey everyone, welcome back to [Your Channel Name], your go-to place for smart investing tips! Today, we're diving into an important topic: When should you book profit if you own shares of a company? If you've ever wondered when's the right time to cash in on your investments, this video is for you. Let's get started!"

When You Reach Your Target Price

"First up, always set a target price when you invest. Before buying shares, decide what return you're aiming for—50%, 100%, or maybe a specific dollar amount. Once the stock hits that target, it’s a good idea to book profits.

Why? Because sticking to your plan helps you avoid emotional decisions. It’s better to walk away with gains rather than getting greedy and risking a downturn. Remember, discipline is key in investing."

When the Fundamentals Change

"Next, keep an eye on the fundamentals of the company. If the company’s performance starts to weaken—like declining revenue, rising debt, or management issues—it might be time to reconsider your position.

For instance, if a company that used to have double-digit growth suddenly reports losses for a few quarters, that’s a red flag. It’s better to lock in your profits than watch the value of your investment erode."

When the Market is Overheated

"Markets can be emotional, and sometimes stocks become overvalued. If a stock’s price has surged way beyond its fair value, booking profits could be a wise move. For example, during a market rally or hype-driven phase, some stocks trade at sky-high valuations that aren't sustainable.

Use tools like the price-to-earnings (P/E) ratio or price-to-book (P/B) ratio to assess if the stock is overpriced. Selling at these peaks can protect your gains."

When You Need Liquidity

"Life happens! Sometimes, you might need cash for personal expenses, emergencies, or new investment opportunities. If your portfolio has grown significantly, it’s okay to book profits and use that money elsewhere.

Just remember to weigh the costs—like taxes or missing out on future growth—before making your decision."

To Rebalance Your Portfolio

"Last but not least, think about booking profits to rebalance your portfolio. Let’s say one stock has performed exceptionally well and now makes up a big chunk of your investments. That’s risky because it’s putting all your eggs in one basket.

By selling a portion of that stock, you can diversify and reduce your exposure to a single company. Diversification is a great way to manage risk and ensure steady growth over time."

"So there you have it—5 scenarios when booking profits makes sense! Remember, the stock market is all about strategy, patience, and discipline. If you found this video helpful, don’t forget to like, share, and subscribe to [Your Channel Name]. And let me know in the comments—when do you decide to book profits?

Thanks for watching, and I’ll see you in the next video!"