Once you've chosen a large company to invest in, you should set quantitative targets. The price at which you'll sell the company, and the amount of time you'll keep your money in the company before moving on to the next opportunity.
The strategy I use is to sell a stock is when it's made a 3-5% gain. I don't like to sell large companies at a loss, because it's been my experience that they make a comeback. However, when my investment has dropped 8 - 10%, especially if it's a large company,I sell. Whatever the target is, it's good to determine the amount of money I want to make before I hit the "BUY" button.
The second target to measure is time. For example, if you're still even after one month, and haven't made your 3-5% gain, will you continue to hold this inactive company at the risk of missing an opportunity somewhere else?
My rule of thumb for Toronto Stock Exchange investing is to give a company three months. If it hasn't generated the 3-5% return by then, it's time for me to move on, usually around the price I bought it for, or in most cases slightly higher.
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