Consider Selling After a Merger or an Acquisition

On average, the price at which a company is bought out is 20%-40% higher than what the stock currently sells for. This means that the investor holding the stock has lucked out and it may be time to sell after the announcement. Sometimes it would make sense to keep the stock in the acquiring company if it would mean tremendous benefits from the newfound partnership. However, this may take many months, and there may be better opportunities elsewhere, which brings us to our next tip...