Most of the investors give a lot of importance only to buying. That is buying right shares at the right price. But selling is also important. Selling at the right price and at right time.
In most of the advice and article written by analysts and brokers, one can get a lot of buying tips. Many however neglect article or advice on selling stocks.
Buying shares at the right price is important since it determines profit gained. At the same time selling shares at right price determines actual profit.
Must Read: How to become a Successful Stock Trader?
Since share market moves in both the direction, what are quality stock today may not be so after a decade or so down the lane. One should go through the performance of shares, one is holding after few years’ intervals. If their performance is gradually decreasing it is better to go in for other high performing shares.
One has to develop own plan of action or the price target is achieved. Here are few proven tips that can help you decide the right time sell shares. Otherwise you can contact stock advisory company to know more.
.1. Swift or instant price appreciation
Share markets are volatile in nature. They swing in both the directions. That is, they are highly unpredictable and uncertain. Sometimes the swing is very dramatic and sharp.
When you buy shares and they appreciate swiftly in a short period of time. It will be a wise decision to book profit and move ahead. One can again purchase when prices fall. After your sell and the shares still move north, you can comfort yourself that you have not gone broke by booking profit. Other opportunities are always open. Like nifty future tips or nifty options tips
2. Shares reaching stop loss level
Share prices move in both the direction. Suppose you have purchased shares at a certain price. After a certain time, you see that the price is constantly spiraling down. You may encounter a loss. As the prices keep dipping, your loss increases proportionally. But you can minimize this loss right at the beginning that is when you have purchased. Always remember to place a stop loss order.
Must Read: What is a stop loss order in share trading?
So once you purchase the shares, you have to decide how much loss you can absorb. Once you come up with that figure, you can place the stop loss at that point. So in future, if share prices reach your targeted price your sell order will be automatically be triggered. Thereby saving you from a huge loss.
3. Decreased dividend or holding back
The dividend is paid by the company to its shareholders when the company makes the profit. Usually once in a year and as decided by the company’s management.
If the earnings of the company increase they pay a higher dividend. Conversely, if the company is in loss or not making sufficient earning it does not declare the dividend.
Must Read: How to avoid big loss in share market?
If the company is decreasing or cutting dividends than it signals that the company is in financial difficulty. Perhaps it the right time to sell your shares. However, the company may cut or decrease dividend for business expansion or may be considering buyback offer or some acquisition etc. If it is the reason, then you should hold your shares for some time and wait and see the results. You can get best results of nifty options tips from advisory companies.
You should get to know the reasons first before taking any further steps.
4. Problems in the invested sector
Investors invest in shares after analyzing the company from many angles. But what happens if the entire sector is tumbling?
Few reasons for tumbling of the entire sector can be government policies or rules which are not favorable. It can be because of the unfavorable economic condition, political uncertainty, recession etc.
In such an unfavorable business situation of the complete sector or industry, it is better to sell the shares and exit before getting deep in losses. One can also go in for commodity trading to diversify the folio, and get commodity tips.
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