If you take a long-term view of investing,
you may buy a stock and hold onto it until it rises substantially
in price — sometimes over a period of years. But if your
investment goals are nearer term, you can buy stocks you expect
to increase in value in the short term and establish a set of
guidelines to help you decide when to sell.
For example, you might always sell a stock
whose price has increased 20% and use the gain to make another
investment. You'll want to establish a similar downside position,
or cut off, to limit your losses in a falling market.
