Lighten up ... rotate out ... take a little off the table.

Whatever you call it, it all means selling. And no matter what the Fast Money guys tell you, selling is tricky business. So before you pull the rip cord, ask yourself this:

"What if I had never sold a stock?"
Would you have more money now, or less? I set out to answer that question this morning, and to back it up with some hard data. I chickened out.

I already knew the answer. If I had never sold a single share, I would be ... richer than I am today. How much richer? Much richer. I can't give you a precise figure, because I knew that once I saw it for myself, I'd have to go home and kick the dog.

It gets worse and worse
I bought Qualcomm (NASDAQ:QCOM) on a tip back in September 1992. I dumped it that Thanksgiving for a quick double. OK, that's not exactly true. In fact, it's an out-and-out lie. But I could have, and it does illustrate my point.

"I sold Qualcomm in November 1992" is one of the most sickening things you'll ever have to admit to a fellow investor. After all, since that first double, Qualcomm has doubled again ... many times. I didn't flip rival Nokia (NYSE:NOK) for a quick double, either. But I know a little how that feels.

If you pull up a long-term chart for medical waste handler Stericycle, you'll see a steady ramp upward, connecting $2 to ... the top of the freakin' world. (OK, only to around $60, but still.) You guessed it: I bought Stericycle in the single digits in 1998 and sold it the next year. That, my friend, is the most painful double of my career.

"So what did you do with the cash?"
How should I know? I probably bought another stock, but do you think it did as well as that? Fat chance. I know I didn't have a better stock in mind. I don't recall buying a house or even furniture, either. (You'll see how this is relevant in a moment, believe it or not.)

No, I dumped a 25-bagger to lock in a double. But what did I really "lock in"? Zip. You never do, unless you pull that money straight out of the market, which is not something you should consider now, especially if you're in your prime investing years.

That's right. Tempting as it is, I don't think you should try to time the market. A lot of folks claim to do it -- and a few actually seem to pull it off -- but not me. In fact, you might want to brace yourself, because I'm going to go one giant step further.

I barely understand valuation
At least, when it comes to selling. Sometimes stocks get so attractive you have to buy. For example, when litigation overhang knocked Altria (NYSE:MO) to ridiculous lows in 2000. Or when cheap oil did the same to Halliburton (NYSE:HAL) a few years later.

Or right now, when tech giants like IBM (NYSE:IBM) and Microsoft (NASDAQ:MSFT) are trading at around 10 times earnings. Buying value makes sense. But the math gets dicey when it comes to selling -- especially winners.

The fact is, I've met some great stock pickers in my day, but not many great sellers. Come to think of it, I've never met a great seller.

Promise me you won't get too cute
That's why I wasn't surprised to hear that my old pal and legendary investor Bill Mann and his partner Seth Jayson are imploring their Motley Fool Hidden Gems subscribers to follow Warren Buffett's lead and buy this market. They work hard and stick to the fundamentals.

Plus, as dedicated small-cap value investors, they're fishing a rich pond. Wall Street isn't snooping around these lesser-known stocks yet, which creates inefficiencies and pent-up demand, as I learned the hard way myself with Stericycle in 1998.

But just so you don't write me off as a Hidden Gems cheerleader, I'll let you in on a secret: I use these guys to lead me to undervalued small caps with big potential. From time to time, they tell me to sell, but I typically don't listen -- and I probably won't in the future. Especially not if it's a winner. I never sell on valuation.

That's how tragedies happen
After all, market-timers tell you that buy-and-holders like us get wiped out in bad markets. But then you pull up chart after chart of "boring" old stalwarts. For example, Dow component United Technologies (NYSE:UTX), another stock I sold.

What do you see? A gentle slope skyward, that's what. So how on Earth did anybody ever lose money buying and holding stocks like that? Good question. Know what else looks like that?

The Dow. Or the S&P 500, for that matter -- a.k.a. the market. Granted, when you zoom in on periods like this one, the ride looks bumpier, but the long-term trend is skyward. So how do you lose money in stocks? Well, you either buy at the top -- and only at the top -- or you get cute and buy and sell along the way.

Consider this approach instead: Sell your stocks when you want to buy a house, furniture, or other major purchase. Sell a little when you find you have too much in stocks and want to buy some bonds. Sell when you have too much in any one stock. But sell a stock, or a dicey market like this one, on valuation alone at your own peril.

You don't have to go it alone
OK. Enough preaching. Like I said, when you're a member of a stock-picking advisory service like Hidden Gems, much smarter investors than I will tell you when to lock in your gains. But remember, the choice to sell is always yours.

And right now, I'm not selling. I'm buying. If you'd like to join me, but are maybe a little gun shy or short on ideas, how about this. Take a free 30-day trial to Hidden Gems right now. You'll get Bill Mann and Seth Jayson's top five picks for new money right out of the gate.

Then you can take a whole month to check out the member-only website and complete service, and verify everything I've just told you without risking a cent. But whatever you decide, just promise me you won't get too cute.

For a peek at the five stocks Bill Mann and his team are recommending for new money right now, and to find out more about taking a no-risk free trial to Hidden Gems, click here.

This article was originally published on July 22, 2005. It has been updated.

Fool writer Paul Elliott promises to keep you posted on Bill Mann's progress at Motley Fool Hidden Gems. All picks and results are posted on the Hidden Gems website, which is all yours with a free trial. Paul doesn't own any stocks mentioned. Nokia and Microsoft are Motley Fool Inside Value recommendations. The Motley Fool is investors writing for investors.