When is the best time to sell ASX shares?

When I buy ASX shares, I buy for the long term.

Like Warren Buffett, my favourite holding period is forever.

Additionally, I prefer to hold a small portfolio of less than 10 stocks.

For me, such a mindset helps to encourage a focused approach.

By placing those conditions on myself, I'm forced to be particularly selective.

I need to make sure my research is thorough before I can back a company for the long run.

And while I must be convinced that I'm investing in a great business before I hand over my cash, my research doesn't end after purchasing the stocks.

I learnt the hard way that it pays to keep an eye on the companies I'm investing in.

That's another reason why I tried to keep my holdings to less than 10 stocks.

I don't have the capacity to monitor any more than that.

But sometimes things change.

And when the fundamentals of a business change, we need to reevaluate our position.

That's why I'm looking at selling my Domain Holdings Australia Ltd (ASX: DHG) shares.

Back in February, US real estate company CoStar Group Inc (NASDAQ: CSGP) announced its intention to wholly acquire Domain, buying up almost 17% of Domain's shares on market.

Domain's share price jumped by more than 40% on the back of the news.

Clearly, that was a big win for shareholders, particularly Nine Entertainment Co. Holdings Ltd (ASX: NEC) with its commanding stake in the real estate platform.

What next?

Domain's shareholders are set to vote on the offer in August.

It's likely the deal will go through, as Domain's board and largest shareholder have indicated their support for the CoStar takeover.

If the deal does go through, CoStar will pay $4.43 each for Domain's remaining shares.

With Domain shares currently trading at around $4.37, there is still some potential upside for investors.

Domain also announced it may pay shareholders a fully franked dividend of up to $0.10 per share.

Still, I didn't sign up for this.

I saw more potential in Domain and, like CoStar, I still do.

But the way things are heading, it looks like my time as a Domain shareholder is coming to an end.

I need to ask myself: Do I want to wait around until August to see if the deal goes through and collect a little bit more on top of the current share price?

Or could I put those funds to better work?

Opportunity cost

The CoStar deal negates my original investment thesis on Domain.

Clearly, the fundamentals have changed.

I see better opportunities on the market.

That's why I'm selling my Domain shares.