Everyone knows the secret of investing success, don’t they? I get this advice from my friends around town all the time. Buy low, and sell high.

Everyone knows the secret of investing success, don’t they? I get this advice from my friends around town all the time. Buy low, and sell high.

What I have observed, however, is that the discipline of selling investments is absolutely the most difficult task for people to do. It is tough for a variety of reasons. Most of them are emotionally based.

If one is fortunate enough to buy something early on as it begins to trend upward in price, then it will generally continue to move up until it reaches a point at which it is too expensive compared with its revenue, profits and future growth expectations. Will Rogers, cowboy humorist of the first half of the last century, was quoted as saying, Take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.

I was talking recently with a friend who was trying to figure out when to sell his Apple stock. This is such a great example, let’s examine it as a case study. Year to date through early April, it rose almost 60 percent in price. Now the gain is down to 38 percent. So now what? Should you sell it or keep it?

The fundamentals seem to be still wonderful. Apple has reached the pinnacle of success worldwide and has a market value of well more than $500 billion. It has a net profit margin of 25.8 percent after taxes. However in the short run, it has been priced for perfection. The herd can be very fickle, and Apple has lost more than 50 percent of its value several times in the past.

There are some wise sayings and rules that may help you sell. Pigs get fatter but hogs get slaughtered is one of my favorites. William J. O’Neil, founder of Investor’s Business Daily, preaches a hard and fast rule of never losing more than 8 percent of your initial investment in a position and never losing a profit after it reaches 20 to 25 percent. His research shows that market-leading stocks, having doubled or tripled in price, then fall by an average of 72 percent once they reach their peaks.

Don’t be one who says, Woulda, coulda, shoulda sold. Have a disciplined plan to sell that makes sense to you.

Yes, everyone says, Buy low and sell high. But few actually sell and bank the profit.

Statistics are taken from TeleChart software service, Worden Bros. Inc., 2012.