Here's a checklist an inside-out investor might run through in deciding the "Is it a good time to sell?" question.

Is my financial foundation still rock solid? That is, am I still debt-free (Level 1) and is my contingency fund (Level 2) still sufficient? If not, I should sell enough stock (or stop contributing to my 401(k) plan long enough) to repair the cracks in my foundation.

Are my earlier assumptions about my lifetime earnings, retirement and lifestyle goals, health needs, life expectancy and emotional tolerance of risk still acceptable? Changes here might dictate a change in my portfolio mix between stocks and bonds (5 Easy Steps to Start Investing the SMI Way).

Are my protective boundaries still in place? If not, what adjustments should I make at this time? For example, I sacrifice needed diversification if more than 15% of my total investment portfolio is in the company stock of my employer. In that case, even if I believe my company's stock will do well in the future, it's probably wise to sell the excess and reinvest the proceeds in other assets (see Will Company Stock Help — Or Hinder — Your Retirement Dreams? ).

Am I meeting my giving goals? If not, perhaps I should make lifestyle adjustments or sell some of my stock holdings in order to fund my giving.

Notice that the focus is on the personal needs and circumstances of the individual, not on the headlines of the day which almost never tell you anything that will enhance the quality of your decision-making. While current events may provoke you to run through your personal list of review questions, they should not dictate the answers.

© Sound Mind Investing

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