One, you pocket some profit, and second, you still own the share at a lower price of holding.ĭo not sell a value stock in full: For a promising stock, where you have developed conviction and are holding it for several months, and you plan to sell on getting expected profitable price, do sell it, but partially.
This way, one could be doubly benefitted. Don’t panic! Rather watch its price movement for a few days, and depending upon your conviction and judgment on the value and promise of the stock, you may re-enter, especially during its consolidation phase. On the other hand, quite possibly, the price of the equity may decline mildly or sharply, after you have sold the stock. Since the markets are highly volatile, by undue wait in the hope of catching the peak price, you might miss the bus. And sell it as soon as it meets your expectation, devoid of greed. Set a realistic price target for sale: Set a tentatively realistic price target of your stock, for sale. Here are a few things to keep in mind while selling a stock. Buying the targeted stock then may prove favourable. This is a common observation that mostly a stock price shoots up on a tip or a news during trading hour, but gradually it often loses steam towards the end of the closing hour or the next day. Also, it is important to understand whether a recommendation is for trading or for positional buy. Ignore rumours and unauthorised news: Don’t rush to buy instantly on the basis of a rumour or a tip, rather wait for the price to settle down reasonably. Give high dividend yield stocks the attention they deserve, and use them to create and expand your portfolio. The lower the price of the holding, more safe and secure it becomes in the long run.ĭividend yield: Give due importance to high dividend yield stocks, and to build and expand your portfolio advantageously, try to plough back dividend, partly or in full, for buying more shares, if money is not urgently required. That said, avoid averaging for a fundamentally weak stock. However, if you believe in the potential and value of the stock, buy more in one or two lots on every dip. Putting all eggs in a basket may prove harmful.īuy a stock with intrinsic value: An intrinsic value stock is one which has sound fundamentals and seems promising, but is available at a discount, because of market conditions.Īveraging price of holding: Sometimes, owing to judgmental error or market volatility, one might have bought a stock at its peak price. Also, keep your portfolio diversified and expanded to a manageable extent. Disciplined and long-term SIP often pays.
Suitable price: Set a realistic price target for buying a stock, based on your conviction and judgment, gauging the market trend.īuy in a systematic investment plan (SIP) mode: Buy in smaller lots at a time with SIP. It always pays to buy stocks in the field of your interest and experience. Hence, one must judge, weigh out an option, and go for shopping with conviction, based on available information and facts.īuy stocks from promising and sunrise sectors: There are cyclical, and there are evergreen sectors so as a beginner, prefer buying from evergreen sectors, such as information technology (IT), pharma, banking and financials, selected public sector units etc., and the upcoming sector of renewable energy including ethanol, and electric auto companies to begin with.
Watch and wait before buying: There is no dearth of opportunities in the stock market, and opportunity lost is not lost forever, but calls for a wait and watch approach, rather than rushing for shopping based on news, rumours, expert tip or recommendations. Here are a few things to keep in mind while buying a stock.
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