The right time to purchase and sell stocks
Uncertainty is a part of life, and being prepared for the unexpected can mean the difference between profits and losses. The stock market constantly fluctuates, which makes it difficult to determine when to buy and sell stocks. There are loads of strategies for buying and selling stocks, each focused on maximizing income while minimizing risk.
What is your goal?
Investing during certain times of the year may seem like a good idea, but it depends upon what you plan to use those investments towards. If you’re investing in a future event such as college tuition or retirement, it is more important that you focus on what you are investing in rather than when you are investing. On the other hand, if your investment strategy focuses primarily upon one factor, then choosing a month with a higher chance of success may be a better idea because it will keep your investments going.
Each situation is unique when deciding what you should do with your money. No matter what time of year you decide to invest in the stock market, being educated about how much risk you are willing to take on will help make sure your investments are always working towards your greatest financial goals.
Do your research
Something to keep in mind when selling stocks is that there is no perfect time for everyone. If you manage your investments, it can be beneficial to sell some of your smaller holdings and add them to your more significant investments during months, where they tend to grow more quickly due to events like an election.
There is no perfect time for everyone when it comes down to investing in the stock market because there is no way to ensure your investments will rise and fall. If you do the research and see what has happened in previous years, you can determine which months tend to be more profitable.
When researching the right time to buy stocks, there seem to be conflicting opinions. Many articles suggest that if someone wants their investments to grow over five years, they should only invest money in the stock market during even-numbered years (April through October).
Some mutual funds and brokerage houses claim that people will invest more money during odd-numbered years (January through September). The truth is that both sides have valid points, but what matters most is what you are doing with the money that you have invested.
The best time to buy stocks varies from person to person and depends on several different factors. Whether you should be investing in an odd-numbered year like some mutual funds claim or stick to even-numbered years like many brokerage houses suggest depends on your individual goals and how much money you plan to invest at once.
Strategies to ensure maximum income
One of the most common ways to maximize income from stocks is known as averaging. This strategy involves regularly purchasing a fixed amount of a particular stock over time regardless of fluctuations in price. For example, if one had $500 available every month to invest in Amazon.com, one might buy different amounts each month. By averaging out price fluctuations this way, one reduces risk because if the stock price falls significantly between purchases, one will buy it much cheaper than before.
Another popular strategy is to purchase mutual funds that hold many different stocks to diversify risk. This strategy also increases overall portfolio value over time by including companies with varying levels of success. Mutual funds are usually considered safer investments because they are managed by professionals who constantly monitor the performance of individual stocks within the fund. Whereas individual stocks tend to fluctuate more, increasing the risks for investors as they could sell their shares at the wrong time.
In closing
There are many factors an investor should consider before purchasing and selling stocks. The three most significant include: whether to use dollar-cost averaging and mutual funds or purchase individual stocks with higher risk and potentially higher returns; how much money to commit to investing; and taking into account one’s financial situation. You can follow this address for more information on stock trading.
