Heeded Broker: Sold Too Soon

My biggest blunder was several years ago, when I'd bought 100 shares of Wal-Mart. Shortly thereafter, my broker went to work for a different company. My new broker advised me to sell Wal- Mart and buy shares of Cisco Systems, for $22 per share. When it hit $30, he advised me to sell, which I did. After looking at the value of these two stocks today, I kick myself. Needless to say, I no longer have this broker.

— James K., Cedar Hil , Mo.

The Fool Responds: As you've learned, a good way to make some big bucks is to stay invested in great and growing companies for many years. Wal-Mart shares have increased in value about fivefold since you bought them, and Cisco shares have risen more than 10-fold. Your Cisco story isn't uncommon — many people sell their stock as soon as they hit a target price (representing, for example, perhaps a 10 percent or 20 percent gain). That's profitable, but you can miss out on many more gains if the firm is still thriving and undervalued.

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