Sell if Fundamentals Change

Monitor your investments.  If the fundamentals behind them change, don't hesitate to sell them.  Many stocks and even mutual funds change, and when they change enough, they shouldn't be part of your investment anymore.  For example, suppose you own stock in Wal-Mart and are losing money.  You may not want to sell at a loss.  However, assume that Target is starting to take market share and Wal-Mart changes its strategy from growth to price cutting and loses some of its top management.  It just doesn't make sense to keep the stock anymore.  You bought it because you trusted their management and for growth.  Now that those factors have changed, don't hesitate to get rid of the stock and invest in something else that fits your investing plan.

Stock prices will always fluctuate.  Don't try to time the market and buy and sell based on these swings.  Rather, watch for the underlying business to change.  When you see change that doesn't meet your objective, get rid of the investment.  Don't sell just because the price goes down or up.