It’s the dawning of a new year and you finally have some money to invest. Perhaps you just got a raise. Or, maybe an end-of-year bonus is burning a hole in your pocket. Either way, you need to be smart about investing if you want those extra dollars to count. Shutterstock The problem is, you have no clue where to invest your cash. While you’re aware of the myriad investing options available, the sheer number of possibilities is overwhelming. In the investing world, this is called “paralysis by analysis.” You spend so much time analyzing your options that you wind up putting it off and never investing at all. And eventually, the extra cash you set aside gets consumed by bills or unexpected expenses. In other words, life happens. 4 Investments You Should Absolutely Make in 2018 If you want to make sure your extra cash doesn’t disappear, you need to invest it right away. A certain amount of analysis is fine if it helps you find the right investment options for your
While quite a bit of time and research goes into
selecting stocks, it is often hard to know when to pull out – especially for
first time investors. The good news is that if you have chosen your stocks
carefully, you won’t need to pull out for a very long time, such as when you
are ready to retire. But there are specific instances when you will need to
sell your stocks before you have reached your financial goals.
Also read>> 5 Steps To Start stocks Trading
You may think that the time to sell is when the stock
value is about to drop – and you may even be advised by your broker to do this.
But this isn’t necessarily the right course of action.
Stocks go up and down all the time, depending on the
economy…and of course the economy depends on the stock market as well. This is
why it is so hard to determine whether you should sell your stock or not.
Stocks go down, but they also tend to go back up.
You have to do more research, and you have to keep up
with the stability of the companies that you invest in. Changes in corporations
have a profound impact on the value of the stock. For instance, a new CEO can
affect the value of stock. A plummet in the industry can affect a stock. Many
things – all combined – affect the value of stock. But there are really only three
good reasons to sell a stock.
The first reason is having reached your financial
goals. Once you’ve reached retirement, you may wish to sell your stocks and put
your money in safer financial vehicles, such as a savings account.
This is a common practice for those who have invested
for the purpose of financing their retirement. The second reason to sell a
stock is if there are major changes in the business you are investing in that
cause, or will cause, the value of the stock to drop, with little or no
possibility of the value rising again. Ideally, you would sell your stock in
this situation before the value starts to drop.
If the value of the stock spikes, this is the third
reason you may want to sell. If your stock is valued at $100 per share today,
but drastically rises to $200 per share next week, it is a great time to sell –
especially if the outlook is that the value will drop back down to $100 per
share soon. You would sell when the stock was worth $200 per share.
As a beginner, you definitely want to consult with a
broker or a financial advisor before buying or selling stocks. They will work
with you to help you make the right decisions to reach your financial goals.
Also read>> 10 Golden Rules for Stock Trading Success
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