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Know When to Sell
Your Stocks
After spending all the time, energy and efforts in doing research
on which stocks are the best buys, the first-time investor is
sometimes at a loss when to pull out while the going is good or
bad. The good news for stock selling is that if you have picked up
some really good stocks do not even think of pulling out or
selling them, for a very long time. This means, till such times
you retire perhaps. Of course, there are some special situations
when you have to sell your stocks and should not wait for an
opportune moment, which can be much before you have reached your
personal financial goals.
Usually the stock broker will advise you to sell off your stocks
when the prices are about to slump. But this need not be the right
decision to take at that time.
Stocks by nature tend to go up and down, depending on the economic
scenario or the country as well as global economy. On the other
hand, the economy is also dependent on the stock market. This
inter-dependence may make stock market slump or even bounce back
with rapid succession. That is the reason it is rather difficult
to judge whether it is the right time to sell or just hold back.
The way you researched to find the right stocks to buy – you also
have to keep a tab on the pulse of these corporations. Many
factors affect the stock market. A new CEO joining, a merger, a
sizing down operation, a plummet in the industry to which the
company belongs, and many such internal as well as external
factors affect the stocks of a company. Be that as it may, there
are essentially three broad reasons for selling stocks.
The number one reason is when you have reached your financial
goals. If you have reached retirement age, you might decide to
pull out of the stock market and put away all your earnings to a
safer financial vehicle – like your savings account.
This holds true for all those people who invest to basically
finance their retirement so that they can relax after a hectic
work life in the comfort of substantial money. The number two
reason is when the industry in which you have put in your money
goes through some sort of turmoil, caused by internal or external,
political or any other factor. You know that these factors will
cause the stocks to drop never to rise again or the possibility of
such positive development is very remote. The right time to sell
your stocks during such situations would be when they are just
starting to drop. This means that you have to constantly alert and
keep vigil on the market dynamics.
The third reason to sell stocks is when the going is incredibly
good. If your stock value is $100 and you find that it has risen
to $200 per share the next week, you should immediately go for the
kill and sell the shares. The current price of $200per share makes
a neat 100% profit in the shortest possible time.
As a fresher in the world of stock selling, you would obviously
like to consult your stock broker or your financial planner who
has be in a better position to advise you and guide you in the
matter of selling stocks so that you can make the right decisions
at the right time.
Article Source:
http://www.imargin.com |
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