Some people have the gift of knowing how to buy and sell stocks while others are horrible and have no clue as to how to buy and sell stocks. These are things that you will need to learn in order to be successful in the stock market because knowing how to buy and sell stocks is how you will be making a profit. If you do not have the slightest idea as to how to buy and sell stocks then you can make extremely bad decisions and even lose a fortune.
If you are good at what you do and know how to buy and sell stocks then you surely have a gift for the market. Knowing how to buy and sell stocks is what the stock market is all about and having this knowledge or talent can make you a lot of money. Being
able to determine the right time to buy a stock is needed knowledge because you will want to swoop in and buy these stocks at their lowest price. From there you will want the shares to rise in value and therefore allow you to make a profit. As long as you are able to sell the shares after they have increased in value then you will make a profit. This is the basic idea of the stock market.
On the other hand, the other spectrum of knowing when to buy and sell stocks is obviously the act of selling them. Since you want to make a profit on these stocks it is in your best interest to sell them when they are at a rate that will bring you maximum profits. Although it is in your best interest to sell these stocks when they can make you a profit, it can be dangerous to wait too long to sell a stock that has increased in value. Some people will decide to wait after their shares have increased in value because they will want to sell them when they are at their highest value, but this can be dangerous because just as a stock can increase in value it can also decrease in value. Knowing the right moment to sell a stock is needed in this case otherwise you can very easily miss out on an extremely profitable opportunity.
Knowing when to buy and sell stocks is the most important knowledge that you could ever learn. That is because knowing when to buy and sell stocks will not only allow you to make the most profit, but also to lose the least amount of your investment. The knowledge and the talent of knowing when to buy and sell stocks, is quite possibly the most sought after knowledge in the entire world.
Tips on when to buy and sell stocks
Although the stock market appears to be busy throughout the week, many investors are facing challenges in making decisions on when to buy and sell stocks. This article will focus on what an investor should look for in a company before making his final decision to buy or sell stocks.
An investment decisions to buy stocks in the stock market might be an easy decision to make. This is because you have money and your main aim is to keep it growing. However, the decision can be challenging based on the many factors that should be considered. The following are some of the factors that you should consider before making a decision to buy a company’s stock.
Every investor will want to be associated with a company with higher profit margins. You are required to analyse the company’s financial reports, check on profitability trends year after year. Look at the quarterly, semi-annual and the annual reports. A good company is one whose profits are gradually increasing every financial year and investing in it might be the starting point to watching your money grow.
The buying price
You might have been willing to purchase a certain companies stock but the stock price has been a barrier to you. Prices have been far much higher for you to invest. When finally the stock prices go down drastically, it will be an opportunity for you to invest. Of course you understand that the company is stable enough and that the stock prices will stay lower for only a short period.
The company’s market share
Every company has its customers. The success of a company will be determined by the customer base it has. Competition is inevitable in the current world and a company that is able to maintain a larger market share will always enjoy good returns. When making an investment decision, you should prioritise on investing in a company which enjoys a larger market share. A bigger market share is an indication that most customers are loyal to the company and that they are always satisfied with what they get from the company.
The director’s integrity
A company that is managed by good directors who are always of good integrity will always prosper. The best leaders in a company will always put the interests of the company first. A closer look at the backgrounds of both the company and its leaders will be of importance to you. Do the directors involve themselves in state politics? If yes, what are their interests in doing so? if some of the directors are new then you will need to have a look at where they came from and why they left their previous jobs. Stocks in a company with good management will always give good returns as the leaders will always be awake.
Does the company comply with the law?
A good company does what the law requires. Does the company risk being banned from offering the services to the people? Does it pay tax as required? If a company for example does not pay tax, then it’s a possibility that in future, the tax collector might demand a lump sum payment of the tax and as a result the profits will decline. This will negatively impact into the company’s stock.
What the company does
Many companies nowadays have websites. It important to go through the company’s website so as to have a clear understanding on what the company does. Knowing what the company does will assist you make a clear picture on what the company’s future will look like. You will actually be able to determine whether your stock values will grow or decline in future.
You might have had an easy time when buying your stocks. However, a decision to sell them may not be an easy one. This is because like any other investor, you will need to make a reasonable profit. The following are some of the reasons why you should consider selling your stocks.
When the company’s productivity starts declining
As an investor you are require to keep an eye on the company’s key financial indicators. Take a look at company’s profit margin. Is it on the declining trend? Look at the sales. Are they going down? If the answer to these questions is yes, then it’s your time to consider selling your stocks. At this point you will have known where the company will be in the near future and your quick decision to sell your stocks will save you from financial losses
When the stock price is higher to your expectation
At the point of buying stock, you are targeting a certain price level. Keep watching the stock prices every now and then. When you realize that the price level has risen high enough to your expectation, make a move and sell the stock without delay. Of course you might want more profit but who knows what will happen next. Be satisfied with your target achievements and you will make more profit.
When the company’s activities are rendered unethical
The company you invested in has been offering the best services when all over sudden, you get to know that its key directors are involved in major corruption allegations with an aim of making good returns to the company. This should be a red flag. Be the fast to sell your stocks and save yourself from losses. When the company’s reputation goes down, many would lose trust in the company and would want to sell their stocks within the shortest time possible.
When the company becomes too much indebted
Too many debts may make a company to be rendered bankrupt. Do not wait. Once you realize that the company’s debts are far much increasing to unexpected levels, sell your stocks. After the company is rendered bankrupt, you might lose a lot by selling your stocks at extremely lower prices.
When you discover an opportunity somewhere else
You might not have achieved your target yet but there is another more promising stock somewhere else. The only money you have is tied up in the stock you bought some time back. Analyze the situation and confirm that the new investment will give you more returns within the shortest time possible than your existing stocks. If that is the case then you will need to make an urgent decision to sell your stocks so as to utilize the opportunity.
When the company is not able to withstand competition
Many companies have one or more competitors offering the same type of product or giving an equivalent service to the same market. Companies are expected to outdo competitors for them to win a majority of the customers. When the customer retention rate is far much declining, then it means that the company is unable to cope with increasing completion. At this point a decision to sale your stocks will be wise. If possible you can consider investing in the other competitor firm.
3 Personality Traits that you need to be Successful in the Stock Market
To be successful in the stock market there may be some things that you will need. No, not the latest software or even an abundance of money, I am talking about personality traits that can make you a successful investor in the stock market. The stock market can certainly allow you to amass a fortune, but if you are not careful it can also allow you to make some regrettable loses, and that is why these three personality traits can help some to be successful in the stock market. Let us delve deeper into the necessary traits that can make a huge difference in how successful you are in the stock market.
Patience is a huge factor in determining your success. Some people will treat the stock market like a casino and expect things to happen overnight. While it is possible for things to happen overnight, it can be extremely dangerous investing in stock that can make these types of jumps. An investor, especially a newcomer to the stock market, should instead use their patience and invest in stocks that are more stable. Doing so will allow for less risk, and will bring in profit over time.
Research is the key to understanding the paths that your investments will take. Many people will blindly invest in a stock only to be surprised when it takes an unexpected turn. Researching your investments before you invest in them is the key to being successful in the stock market. Would you buy a car without first researching the company that makes the car? Would you buy a house without researching the builder of the house? These are extra hours that you should be committing to in order to make your investment a successful one.
The ability to walk away is another personality trait that is needed in the stock market. Some people will get emotionally tied to an investment and they will not be able to rid themselves of it. This could either be because it was good to them in the past or just because it is the stock of a company that they have an interest in. The stock market is not a place to bring your emotions to. Instead every decision that you make should be a well researched and calculated one, because once your emotions start making the decisions you will fail. Every decision that you make should be made with your head, and if a stock doesn’t seem like a good investment after you have done your research then you need to move on. No matter what ties you have to it. Always think with your head.