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Selling stocks in the wake of coronavirus? Here’s a checklist

The stock market’s recent coronavirus jitters demonstrate that if you’re going to sell, it’s best to follow a plan.

Many investors didn’t do that. The volatility caught a lot of people by surprise, helping to explain why the stampede toward the exits became so intense.

Selling stocks, mutual funds and other investments shouldn’t be done as a knee-jerk reaction. Rather, it’s something you should ponder well before the need arises. There are many tax and other factors that you should carefully consider first.

Ponder your reason for selling

You might have to sell at least some of your stock-market holdings because you need the cash. Perhaps you have a tax bill or large medical expense looming or need to raise cash for a down payment. 

But sometimes you might feel pressure to sell simply because you’re uncomfortable with paper losses — or because you assume everyone else is selling. It’s nerve wracking watching prices slide on a down day, but all those red numbers don’t necessarily mean you should take any actions.

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