The missing chapter in most investing books might be called, “When to Take Profits.” Few investment books spend much if any time on that subject.
IBD generally advises growth investors to cash in when a gain reaches 20% to 25%, even during a bull market. Research shows that, more often than not, a stock will start to consolidate after such a gain.
Stocks in the Sector Leaders’ screen carry no automatic exception. Let’s take a look at the Leaders.