Successful strategies to buy and sell stocks

Successful strategies to buy and sell stocks

After I first placed your order to buy a stock, now is the time to think of selling it easy to sell an arrow (I'll show you how later). But the hard part is selling at the right price, no matter what time you sell, you always feel that you could have done better than you did. If you sell a stock too early, you may scold yourself because you missed the opportunity to get potential profits. And if you sell a stock too late, it may shift from a winning position to a losing position (which is painful for yourself and your account). Your goal is to find a good price for you.

 

It is not easy to control the position of the arrow, but it is very important that you learn how to do it. Too many investors are thinking about the stocks they want to buy without thinking about when they are selling. Knowing the timing of selling a stock is as important as knowing the timing of the purchase, as many investors have painfully discovered, buying and holding stocks is not a sale plan even though some investors do not agree with me on this view). And leaving it to circumstances is not a plan either; So, once you buy your first stock, consider why you might sell that stock for it (and if you really are a long-term investor, it may take years). This is a sale strategy.

 

Your selling strategy

 

Your selling strategy should be appropriate for you, your personality, and your investment style. Before you buy a stock, you have to know the price you want to buy and know - if you plan to be a short-term speculator - a target selling price. Long-term investors cannot come up with a reasonable guess that will last for several years in the future. You may have no idea now, and that's okay. With more experience (and after reading the articles of our Sudanese developer website, you will learn and know.

 

 If you develop a plan and remain committed to that plan, you will not be distracted by the often-incorrect views of others, the media, or your own emotions.

 

In this article in the series of articles on investing in stocks, you will learn about diversification, allocation, accumulation, and stock splitting. Let's look at these concepts separately.

 

Diversification

Avoid putting all eggs in one basket

 

Warren Buffett

Diversification is one way to reduce risk. Thus, instead of mortgaging your entire investment portfolio in stock, you spread the risks by investing in a different set of securities (the investment portfolio consists of securities that include stocks, investment funds, bonds, and cash equivalents that you own, the idea behind diversification is that even if one or two investments fail, Your other investments can offset the losses.

 

 

 

At the most basic level, if you put all your money in one share, you are either making surprisingly large profits or will be losing clothes. For example, one of my neighbors put all his money in the company’s shares in great technology, and it is one of the best companies in the world. After ten years of long-term investment, the value of his investment portfolio exceeded $ 1,000.

Instead of selling description of the shares, or even some of them, Jarry kept his shares even as the stock fell more and more. So if I will meet if you should diversify your shares. I suggest that you do so.

In addition, some people invest all their money in the shares of the company they work for, and this is not always a wise behavior: because if the company collides with difficulties, you can lose your money as well as your job.

 

Note: Some companies offer employee stock purchase programs (ESPPs) and allow you to buy company shares at a reduced price. This is, in my opinion, an excellent way to build wealth through the stock market, especially if you work for a good company that is increasing profits, but at some point, it makes sense to diversify your assets by selling some of those stocks.

Here's how the diversification method will be. Let's say you are an investor of 100% (i.e. all of your investable money is in the stock market), in order for your investments to be completely diversified, you need at least 5 to 15 shares in various fields that will later learn about investment funds and ETFs. ), Which offers a direct teaser.

 

Many financial experts recommend that a group possesses a mix of growth, value, and income stocks with a small number of global stocks, and may also consider the shares of large and small companies.

Diversification can be America, and in order to do it right, you need to take into account the amount of risk you can take (this is called the degree of risk tolerance), your age, the time horizon available to you, and your investment goals. Some people just suggest that you buy stocks and bonds, but doing so is not always logical.

 

Adequate diversification really requires an understanding of how and why diversification is successful. One mistake many people make is putting all their money in one sector like technology and mistakenly believing that they are diversifying their investment. Although placing all your invested money in one sector can bring you tremendous profits if you are right, for both if you are wrong (as my neighbor did), you can do great damage.

Note, some people assign financial planners to assist them in the diversification process. It is the female cat who can decide whether or not this path is appropriate for its origins. On the one hand, you want your stocks to diversify appropriately so that you are not exposed to major risks. On the other hand, you do not want your shares to be overly diversified (i.e. when I own a very large number of stocks, investment funds, and ETFs that are so difficult for them to outperform their market averages).

 

Asset allocation

Determine the amount of money allocated for each investment

 

Once you have a diversified investment portfolio, you have to decide the percentage of your money that you want to allocate (or distribute to each investment. For example, if you still have 20 a year to retire, you can invest 15% which are individual stocks and mutual funds and 25 % In bonds, and holds% in cash. This is an example of asset allocation.

In the past, you were told to subtract your age from 100 to determine the percentage of assets that you put in shares. For example, if you are 40, too, 100 minus 4 is equal to 60. This old formula suggests that you invest 1% of the shares and not the bonds.

The problem with this formula is that it is very conservative and it is possible that you will live longer than its money, in addition, an acute market correction situation may cause all of your assets to collapse.

Conclusion: You want to diversify your assets appropriately. Unfortunately, what is considered "appropriate" for someone may not actually work for you, so it takes some time to understand diversification and asset allocation. And you will learn later that there are certain investments such as mutual funds and investment funds that offer immediate diversification.

 

Accumulation

The principle of accumulation is simply to take profits from your profits. There is something that you can do with your shares that can make you rich, provided you are a patient investor, and this thing is called “compound interest” and Einstein wrote about it saying, “It is the eighth wonder of the wonders of the world. The idea behind compound interest is one of the reasons people reinvest in any distributed profits and profits.

 

The accumulation works as follows: You reinvest all of your profits from your investments: interest, dividends, or capital gains. The longer your investment reinvestments your profits, the more money you drain. In other words, you make money on profits, not just on the original investment. If accumulation is new to you, the numbers may surprise you.

For example, if you continue to 100 dollars, and the amount increases by 10% in one year, at the end of the year the total amount will be art dollars if you reinvest these dollars, you will have 121 dollars by the end of the following year, dollars represent the regular profits. Also, the additional dollar is a profit of compound profits or profits gained from profits of $ 10 in the first year.

This may not seem like additional money, but accumulation year after year makes a big difference as the profits of your investment increase, it doubles more quickly. Advocates of accumulation remind you to invest in an early stage of your life if you want to have money at a later time. Believed them; Because it's true, and whatever the steak is, it's time to start.

Accumulation is an elaborate strategy that can make you rich if you start early in your life. The idea is that while the value of the shares you own increases, your gains (trading profits and dividends) multiply as you invest continuously by buying more shares, and this brings in greater profits. The longer you leave your money in any investment, the stronger it will be. John Bogle, founder of the mutual fund company Vanguard and its former president - has called the buildup "the greatest sporting discovery ever for an investor looking for the highest possible return." Investors who believe in buying and holding stocks usually mention strong accumulation in the long run.

The formulas of accumulation have the effect of magic as long as the investments increase in value. The problem in the stock market is that there are no guarantees that your shares will rise in price or that you will achieve a certain return in the market every year.

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