The market continues to rip higher. It seems that the surge in Covid-19 cases in the United States is having little effect on the major indexes. The market’s disregard for the rise in cases, high unemployment, and lackluster GDP growth, has many investors (rightfully) nervous.

The Nasdaq 100 continues to reach new all-time highs, while the S&P 500 has shaken off its 30% plunge in March and is now pretty much even on the year.

Hopefully, you’ve been able to capitalize on the market’s quick rebound and have some holdings that are up nicely in the last few months. If that’s you, and you’re nervous about losing some of those gains, then there’s nothing wrong with taking some profits off the table.

You can sell all or just part of your position. Or you can draw a line in the sand. Set a stop-loss price. If the stock closes below it, then sell the next day.

I’m Practicing What I Preach…

In fact, I recently did took some profits off the table with a stock we’ve only held for about four months…

When I recommended United Parcel Service (NYSE: UPS) over at Top Stock Advisor back in March, we were in the middle of the bear market. Just four days prior, the S&P 500 had tumbled a whopping 34% from its February high — making it the fastest drop in market history.

There was a lot of uncertainty surrounding the markets and the economy (and there still is). Most states were under stay-at-home orders, with many businesses and restaurants closing their doors. But UPS was still out and about delivering goods to families across the country. So, I figured this would be a safe place to park some money until things settled down.

I made a mental note that if shares climbed 20%, I would look at booking my gains. After all, I’ll take a 20% return in a matter of months any chance I get.

UPS does sport a good dividend with its 3.4% yield. But over the very long term, I’m hesitant about its prospects. As e-commerce giant Amazon (Nasdaq: AMZN) ramps up its delivery service it could put a damper on shares of UPS, as roughly 12% of UPS’ sales come from Amazon.

Action to Take

For these reasons, the decision to remove UPS from my portfolio last week was easy. All told, we booked a quick 24% gain in less than four months.

UPS is set to deliver quarterly results at the end of the month, and shares could pop if the company tops estimates. So for those who want to hold on to see what happens, that’s great. But I went ahead and booked my profits.

The point is you cannot be afraid to sell in this market. Everyone has different risk tolerances and goals. And besides, there are plenty of good opportunities still out there, despite the market rally. So if you are nervous about the market and want to lock in some gains, then by all means do it.

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