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The Perfect timing to sell your stocks

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.

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.


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.

Your Sure Way to Success In The Stock Market

Human emotions are always the key to either success or failure in any business. And it is no difference when trading the markets. Read all the books about trading that you want and buy all the successful system that you want. If you can’t control your emotions, you can’t succeed in the markets.

In the market there are but only two main emotions that every trader will experience; GREED and FEAR. When this emotion appears it is not how we eliminate it but rather how we act on it. There are natural emotions that can not be eliminated. This emotions forces us to action, thus how we act on it will determine the outcome.

While no system is absolute, meaning no system will guarantee that you will make money ALL the time. The system seller would say that we would be able to make money consistently, provided we follow their system to the dot.

Discipline is the key. We must have the discipline to say ‘I have reached my target. I should take profits now even though it may go higher’ when greed sets in. And when fear sets in one should say ‘I have to take a position even though the market does not seem to be moving in my favor’

While these are but two circumstances when greed and fears arises, there are, and will be many instances when we need to make a decision to either enter or exit the market. And these are very two most important decisions to take in order to succeed in the markets.

Make Money Even In Bearish Markets.

One of the most important techniques employed by Traders/Investors worldwide to take advantage of falling markets is Short-Selling. This technique works according to the basic principles of Technical Analysis. Just follow the following simple steps to take advantage of this technique.
1. Identify the most weakest sectors and the principal stocks that are industry leaders in these sectors.
2. You can Short Sell these stocks and buy them back later and earn a good income. But please remember to use the stop loss technique if the market reverses direction. You can apply a maximum stop loss of 3% on your capital.

Derivatives

Derivatives are financial contracts, whose values are derived from value of an underlying asset. The underlying asset on which derivatives are based can be commodities, equities (stocks, residential mortgages, commercial real estate loans, bonds, interest rates, exchange rates, or indices (such as a stock market index, consumer price index (CPI) or even an index of weather conditions, or other derivatives). Credit derivatives are based on loans, bonds or other forms of credit.
The main types of derivatives are futures, forwards, options and swaps.
Derivatives are usually used to reduce risk that the value of the underlying asset will change unexpectedly.
Because the value of a derivative is contingent on the value of the underlying asset, the notional value of derivatives is recorded off the balance sheet of an institution, although the market value of derivatives is recorded on the balance sheet.
There are three major classes of derivatives:
Futures/Forwards are contracts to buy or sell an asset on or before a future date at a price specified today. A futures contract differs from a forward contract in that the futures contract is a standardized contract written by a clearing house that operates an exchange where the contract can be bought and sold, while a forward contract is a non-standardized contract written by the parties themselves.
Options are contracts that give the owner the right, but not the obligation, to buy or sell an asset on or before a future date at a price specified today. If the owner of the contract exercises this right, the counterparty has the obligation to carry out the transaction.
Swaps are contracts to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets

Technical Analysis

Technical analysis is a technique that claims the ability to forecast the future direction of security prices through the study of past market data, mainly price and volume. In its purest form, technical analysis considers only the actual price and volume behavior of the market or instrument, on the assumption that price and volume are the two most relevant factors in determining the future direction and behavior of a particular stock or market. Technical analysts may employ models and trading rules based, for example, on price and volume transformations, such as the relative strength index, moving averages, regressions, various oscillators, inter-market and intra-market price correlations, cycles or, classically, through recognition of chart patterns.
However, there are also many stock traders who proclaim technical analysis not as a science for predicting the future but instead as a valuable tool to identify favorable trading opportunities and trends. The assumption is that all of the fundamental information and current market opinions are already reflected in the current price and when viewed in conjunction with past prices often reveals recurring price and volume patterns that provide clues to potential future price movement. In the foreign exchange markets, and commodity markets its use may be more widespread than fundamental analysis.

Fundamental Analysis

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. It is different from other types of investment analysis, such as quantitative analysis and technical analysis.
Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:
to conduct a company stock valuation and predict its probable price evolution,
to make a projection on its business performance,
to evaluate its management and make internal business decisions,Fundamental analysis maintains that markets may misprice a security in the short run but that the correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.Various tools and ratios are used for Fundamental analysis such as the Balance sheets, Profit and loss A/c ,P/E Ratio EPS all of which give the overall picture of the organisation as a whole