Facts

• When you have a stock portfolio, whether it's through work or independently, one of the primary considerations you face is when to sell. If you're short on funds, you may consider dipping into your portfolio and selling stock before it has fully vested in order to make ends meet. Remember that the way to maximize stock is to sell it when the market is right and the stock is at a high value. A major part of making money through buying and selling stock is timing, having the stomach to ride out slumps in the market, and faith that your stock will rebound if it has taken a dip.
  
  

Significance

• One of the most common pitfalls in trading stock is not treating it like an investment. Investments are usually long-term assets from which you make money by waiting until they have vested. When it's time for you to cash in, make sure to have a complete picture of what will take place. Remember that you have to pay income tax on any stocks that you sell. It's also important to remember the goals that you set for yourself when you first purchased the stock. What was the investment supposed to be used for? A college fund? Retirement? Don't treat stocks as disposable income unless that was the reason you bought it. One option is to attach a note with your goals on it to a statement or stock certificate to make sure you stay on track.
  
  

Types

• There are several options to consider when cashing in stock. According to CNN Money, the following are the most common choices: cash exercises allow you to sell your stock and receive money in return; stock swaps let you trade your stock for another type (a great way to diversify your portfolio); and with a cashless exercise, you sell your stock and borrow money from your stockbroker at the same time--leaving you with the profit once the stock sells and without having to pay fees upfront.
  
  

Time Frame

• One of the most common types of stock people own comes from their workplace. This type of stock will appear to be managed for you by your employer, but it's critical to make sure that you take an active role in its management. Treat the majority of this stock as a retirement investment only if you feel secure that your company will last long enough into the future. Don't hold on to too much of this stock. According to CNN Money, "[i]t is generally imprudent to keep more than 10 percent of your portfolio in employer stock." Once again, try not to sell stock until it has become significantly profitable for you, or else there is little point in buying it in the first place.
  
  

Considerations

• There are no hard and fast rules for cashing in stock. A lot of it has to do with your personal timing. Sometimes it becomes necessary to cash in stock and take a loss on it in order to mitigate the damage to your portfolio that a failing company would create. Stocks should not be your only source of investment and are by no means the most stable. Though they can offer high returns, stocks can also ruin a person financially if the market should take a turn for the worst.