Buy good companies and hold them long-term. Billionaire investor Warren Buffett goes a step further. But everyone makes an occasional mistake. Knowing when to cut and run can be as important as knowing what to buy.
Most people stay with the existing trend too long.
To do this with a minimum of time and effort, make a point of looking at the quarterly statements you receive. Publicly held companies send out statements every three months that show how their sales and earnings have fared over the period compared with the preceding three months and the year-ago quarter. The statement also includes a message from the chief executive or chairman, which briefly describes the factors that contributed to that quarter's results. If earnings have been disappointing, the analysis is the same. The answers to those questions are likely to be found in the chairman's message right at the beginning of the report.