When To Buy Or Sell Stocks

My Stock is Going Up. Should I buy More?


If your stock climbs 20% to 25% in 7-8 weeks and the stock still shows strength and growth signals, you can consider buying more of this stock.

How To Understand When to Buy Stocks?


Here are some expert tips that can help you understand and decide when and how to select stocks to buy:
  1. If the company shows growth of about 20% to 25% in last 3 years and last 3 quarters and has potential for long-term and short-term earnings growth, you can consider buying it.
  2. If the sales, profit margins and return on equity is consistently growing in the last 3 quarters, the stock is worth investing.
  3. If the company has launched some dynamic new products or services with great demand or if there is some strong change in the top management of the company, the stock need some attention.
  4. Focus on leading sectors and leading companies in the sector. Don't run after cheap stocks.
  5. Focus on stock where leading mutual funds are investing. Mutual fund companies do lot of study and research before investing.
  6. Focus on stocks that make new highs with high volume.

How to Understand When to Sell Stocks?


When to Buy and Sell Stocks
When to buy stocks is relatively easy to understand. When to sell stocks needs some thinking. Here are some tips to help.
  1. If you  bought a stock 
  2. with some expectation but your expectation is not met, consider selling the stock.
  3. If your stock has made new highs, consider selling some portion of your position. Never sell all your shares. Monitor the stock and the market before selling all your shares.
  4. If you have better alternative stocks than your poorly performing stock, consider selling your stock and take new position in a better performing stock.
  5. Consider selling your stock if you are getting tax benefits.
  6. If something wrong happens with a company and you are expecting things to get worse, consider selling the stock.
  7. If the earning of a company is not improving over 6 to 9 months, then the stock needs some attention. Study the reasons and if required, consider selling the stock.
  8. If you are making loss with a stock and there is no sign of recovery, consider selling the stock. As a basic rule of share trading, most experienced investors sell their stock if it falls by 8% of the buy price. Not booking loss at an early stage can lead to even bigger loss. However, if you have done your homework and have picked the best stock, you can still keep it in your portfolio. Monitor the stock and the company consistently and act according to the situation.
References & Resources: