The Best Time To Sell Your Stocks
Since quite a bit of time and study goes into picking stocks, it is usually difficult to see when to pull out - especially for first time investors. The great news is that if you have chosen your stocks wisely, you don’t need to pull out for a very long time, like when you are ready to retire. But there are certain instances where you will need to sell your stocks before you have hit your fiscal goals.
You may think that the time to sell is when the stock value is about to drop - and you could even be advised by your broker to do this. But this isn’t necessarily the right course of action.
Stocks go up and down a lot, depending on the economy and of course the economy relies on the stock market as well. This is the reason why it is so difficult to determine whether you should sell your stock or not. Stocks go down, but eventually they go back up.
You have to do more investigation, and you have to keep up with the endurance of the corporations that you invest in. Changes in corporations have a deep impact on the value of the stock. For instance, a new CEO can affect the value of stock. A crash in the industry can affect a stock. A lot of things - all combined - affect the value of stock. But there are really only three great reasons to sell a stock.
The first reason is having hit your financial objectives. Once you have reached retirement, you may want to sell your stocks and put your money in safer financial vehicles, such as a savings account.
This is a popular practice for those who have invested for the purpose of funding their retirement. The second reason to sell a stock is if there are big changes in the company you are investing in that causes, or will cause, the value of the stock to drop, with minimal or no possibility of the value climbing again. Ideally, you would sell your stock in this circumstance before the value starts to drop.
The third reason to sell would be if the value of the stocks spike. If your stock is valued at $100 per share today, but drastically rises to $200 per share next week, it is a good time to sell - especially if the direction is that the value will drop back down to $100 per share soon. You may sell when the stock was worth $200 per share.
As a novice, you clearly would want to consult with a broker or a financial advisor before buying or selling stocks. They will help you make the right choices to hit your financial goals.
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