Are you considering when to buy, when to sell, and when to sit on your hands in the stock market? This decision can have a huge impact on your financial success. Thankfully, you have a few guidelines to help you make those difficult decisions.
When considering when to buy, it’s important to look at the underlying fundamentals of the company which you’re considering investing in. Are their quarterly financials strong? How is their management team like? What is their competitive advantage? Do they have a large customer base? All these factors affect the company’s performance and eventually, your investment. When these fundamentals check out and show signs of strength, then this could be a good time to invest in a company.
When it comes to when to sell, there are a few general rules to consider. Firstly, how much have you earned on the stock so far? If your initial investment has more than doubled, it might be worth considering selling in order to secure your profit. Secondly, do you still believe in the company’s fundamentals? If the fundamentals have changed significantly since you first invested, it might be time to reconsider your investment. Finally, it’s important to be aware of the tax implications of any trades you make.
The third decision to make is when to sit on your hands. If you are unsure whether to buy or to sell, sometimes the best decision is to do nothing at all. This can give you time to more carefully analyze the stock, or simply observe the market. The longer you hold your portfolio, the longer it has time to perform, and potentially earn you higher returns.
Deciding when to buy, when to sell, and when to sit on your hands requires careful thought and consideration. Knowing the underlying fundamentals, staying aware of market movements, and considering the tax implications of anything you do are all key factors in making the right decisions. If you do your homework and take your time to analyse the market, your investments should pay off in the long run.