“Buy low, sell high,” goes the adage.

Seems easy enough . . . until it comes time to actually evaluate your portfolio. How does one know when a stock has reached peak value? Further, when it comes to selling your shares, is it really ever possible to have perfect timing?

Answer: rarely.

But there are a few more nuanced ways of determining whether it’s the right time to sell your shares. Here is some stock advice to help you figure out if or when you should sell.

Financial news may factor into your decision. Companies sharing particularly bad news to the public and its investors usually correspond to impending price drops. Long-term investing strategies, however, shouldn’t always be based on short-term news. But if negative news pertains to a company or an industry’s long-term future as a whole—like a company’s principal product instantly falling into obsolescence in light of newer technology—it may likely be a prudent time to sell.

Treat news surrounding major companies with an objective understanding that sensationalist new reports may not always accurately reflect a company’s future price. For instance, the price of Apple dropped almost immediately following the death of CEO Steve Jobs in 2011. That price eventually rose back up again as investors became more confident in the next CEO, Tim Cook.

Although stock prices rise and fall, representing normal fluctuations in the market, major drops or escalations in price may mean it’s time to consider selling. A common way to measure an individual stock price’s condition is by analyzing its price-to-earnings ratio (P/E). Companies like Google tend to sell at high P/Es because of their increased growth rate. Slower growth rate companies suddenly matching or exceeding the P/E ratios of faster-growing companies may be an indicator that it’s a good time to sell.

Market crashes or negative sentiments overall may mean that your portfolio is at risk and that it’s a good time to sell. Long-term investors, however, tend to ride out these bad spells. You will need to assess your own financial goals and investment strategy in relation to overall market trends.

Downturns don’t necessarily mean it’s a prudent time to sell, though. Asset allocation is a viable alternative strategy. Rebalancing your portfolio involves putting different monetary weight in one area while less in another. In this way, underperforming asset classes can be sold and reinvested in asset classes yielding higher.

You may also consider selling your shares for tax purposes. This strategy involves selling for a loss to make gains in other areas. To compensate for gains made earlier in the year, for instance, the IRS permits you to take capital losses, thereby liquidating underperforming stock and eliminating a portion of your tax burdens.

Another potential reason to sell a stock is that it is simply outperforming at an exceptionally high rate. Let’s say you bought a stock expecting a 5% return over one year, but it jumped up 30% in just one month. At that point, the question is whether you should take the profit while the price remains high or maintain ownership with the hopes that it climbs even higher. This decision requires some consideration for the circumstances of your personal portfolio as well as some deeper research into why the asset is performing so well.

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