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

Whatever you call it, it means "selling," and it's tricky business. So, before you reach for 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 myself this morning and back it up with some hard data, but I chickened out.

Let's face it, I already knew the answer. If I had never sold a single share of stock, 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 would scream. How about you?

It gets worse, and worse, and worse
I bought Intel (NASDAQ:INTC) on a tip in December 1986. I dumped it less than a year later for a quick double. OK, that's not exactly true. In fact, it's a lie, but I'm trying to make a point here.

Think about it: "I sold Intel in 1987" is a dark secret to have to reveal to another investor -- even if it was for a quick double. Since that first double, Intel is up another 2,800% in value.

I didn't flip chip rival Advanced Micro Devices (NYSE:AMD) for a quick double, either. But I know somebody did. And I know a little about how it feels. Pull up a long-term chart for medical waste handler Stericyle and you'll see a 45-degree ramp skyward, connecting the mid-single-digits to the ... top of the freakin' world.

You guessed it, I bought Stericyle in the low single digits (split-adjusted) back in 1998. Sold it the next year for a quick double. Even after the protracted correction, it's still up around $50. I call that the most painful double of my life.

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

No, I sold my meal ticket to book a nice gain. But what did I really book? Zip. You never do, unless you pull your profits 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 at times like these, 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 than that.

I barely believe in valuation
At least when it comes to selling. Sometimes, a stock gets so cheap you have to buy it. IBM (NYSE:IBM) when Lou Gerstner took the helm back in 1993 comes to mind. Or how about McDonald's (NYSE:MCD) when it traded down into the low teens in January 2003?

For more recent examples, take a look at today's battered blue chips. Pfizer (NYSE:PFE) and Merck (NYSE:MRK) are selling at around 10 times earnings, for example. My point is, value can work out for you when you're buying stocks you always wanted to own. But the math gets dicey when it comes to selling -- especially winners.

Promise me you won't get too cute
That's why I wasn't surprised to hear that my old pal Andy Cross and his partner Seth Jayson are imploring their Motley Fool Hidden Gems subscribers to follow Warren Buffett's lead and consider buying at this latest dip. They work hard, have a long-term focus, and stick to the fundamentals.

Plus, as small-cap value investors, they're fishing in a rich pond right now. Wall Street isn't snooping around these lesser-known stocks, which creates inefficiencies and pent-up demand, as I learned the hard way myself with Stericycle in 1998. Plus, it's fairly well known that smaller companies (and their stocks) tend to lead us out of recessions.

But just so you don't write me off as a cheerleader, I'll let you in on a secret: I use the Hidden Gems 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
Market-timers tell you that buy-and-holders like us get wiped out in bear markets. But then you pull up chart after chart of "boring" old stalwarts -- say, for instance, Johnson & Johnson (NYSE:JNJ) -- and what do you see? A gentle slope skyward. So, how on Earth did anybody ever lose money on stocks like J&J? Good question.

Know what else looks like that? The S&P 500 -- a.k.a. the market. Granted, when you zoom in, the ride gets bumpy, especially in markets like this. But the long-term trend is higher. So how do you lose money in the market? 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 instead: Sell your stocks to buy a house, furniture, or engagement ring. Sell when you have too much in stocks and you want to buy bonds, gold bars, or Dickensian village collectibles. Sell when you have too much in any one stock or sector. But sell a good company on valuation alone at your own peril.

OK. Enough preaching
Like I said, when you join 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 biting the bullet and buying this market. If you'd like to join me, but are maybe a little gun-shy or not sure where to start, how about this: Take a free 30-day trial of Hidden Gems right now. You'll get Andy Cross 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 members-only website 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 the Hidden Gems team is recommending for new money right now, and to find out more about taking a no-risk free trial, 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 the progress at Motley Fool Hidden Gems. All picks and results are posted on the Hidden Gems website, which is available to you with a free trial. Paul does not own shares of any company mentioned. Pfizer and Intel are Motley Fool Inside Value recommendations. J&J is an Income Investor pick, and Pfizer is a former selection. The Motley Fool owns shares of Intel as well as covered calls on Intel. The Motley Fool is investors writing for investors.