Know the exact time and ways to Buy, Sell, or Hold Your Shares in the Stock Market
A share or a stock is very important when it comes to the stock market because it will be a way for you to earn huge capital gains.
In other words, you could potentially earn a lot of money just by doing some trades in the share market among the share trading company.
However, how exactly do you know when to buy, sell, or hold your shares? Read further to know precisely how to make the trades work for you.
Before I get started, I want to preface this by saying that you should already know what a stock or share market is, what an actual stock is (or represents), as well as having a trading account to start getting into the stock market.
With that out of the way, here some of the industry’s “need-to-knows”:
1. Invest by Thinking of the Long Term
Think of putting your money in the stock market as a long-term investment. This is because most stock market experts agree that you should hold on to your shares, at least, for 5 years.
There are a couple of reasons why this is a great advice that you need to follow. First, 5 years is enough for you to gauge how the market works. Second, you can study how a particular sector performs and how share prices are affected. Third, you want to get higher dividends from the company by holding on to it. The more shares you have, the bigger the payment.
2. Think of Diversification
There is a popular saying that goes, “Never put all of your eggs in one basket”. And that quote is certainly true when it comes to share market trading.
You see, betting all of your money in just one company is dangerous because if that company falls, all of your investments will go down the drain as well. And believe me, these things do happen.
To help safeguard your stocks, you need to think of diversifying your portfolio. You can do this by getting as many shares as you can from as many companies as you can.
There is also this concept called Drip-feeding where you buy shares frequently to help take advantage of the stock market’s erratic price movements.
For instance, if your original capital is $10,000 and you want to use that to buy shares, you can invest all of that and buy shares now.
However, that might not be a wise choice. You see, because share prices can move any time (up or down), you can use this to your advantage.
So, instead of buying 1000 shares for $10,000, buy 500 for $5,000 this month and wait until the next month. Who knows, the share price might go down so you can buy more with the same amount you’ve spent the last month. Heck, you could even end up having 50 more shares using the same amount of money!
3. Stay Away from Scams!
If a trade sounds too good to be true, then it probably is. Because there is a lot potential for your initial investment to grow exponentially, plenty of ill-willed individuals are scamming people to make shady deals.
For instance, if someone unknown to you gives you a call telling you about this particular trade, drop the call and stay away from that person because they will most likely lure you to a bad trade.
4. Never Panic
Look, market crashes or sudden decreases in share prices can happen. You have to be prepared for this, but in the event that it does happen, make sure that you stay as calm as possible.
Being panicky is bad for your investment as you will most likely make decisions that will not give you the best profits. Most panicked traders sell their stocks for extremely cheap prices and they lose a lot of money just by doing that.
So, stay calm, do not let emotions get in the way, and always wait it out so that you can make a sound and just decision.