As with a lot of things in life and money, timing is everything.
This adage is no less true when it comes to stock trading and learning how to invest successfully. Buying and selling a stock at the right time versus the wrong one can be the difference in your return and the long-term profit you make from an investment, so we wanted to help you with that process.
Accordingly, we will be taking time today, in part one of our little two-part miniseries, to discuss how to know the best time to buy a stock.
Here we go.
Buying a stock, essentially, is about knowing the point at which you can minimize the cost associated with the purchase. After all, the idea with/the goal of stock trading and investing is to maximize the return or profit that you “take home”.
To capitalize on a stock’s “low point” when it comes to price, Investopedia notes as a general tip that this typically occurs around the middle of a month, making the best time to buy a stock somewhere between the 10th and 15th of a particular month during the year.
Although real success with investing and trading stocks necessitates keen research and a sharp eye for detail/nuance, here are a couple more tips and tricks for figuring out the best time to buy a stock you have been keeping an eye on.
Times when a stock appears undervalued are obviously a good indicator of a “time to buy”. Most average people acquire information on a stock being undervalued by experts in this field, so our advice would be to conduct research and follow some of the top investors in general, as well as in the specific industry that is home to a stock you may be looking to purchase. Leverage this understanding to determine if a stock is undervalued and use the opportunity, if you get one, to pounce on buying a stock that you think will bounce back to make you a nice profit.
Another way to find out a good time to buy a given stock is by tracking company activity. Did a company you are watching closely recently announce that they may be trending towards the acquisition of/merger with another organization? Depending on the situation, and that’s where research comes in, buying a stock pre-movement may be a good idea so you can capitalize on the profit that may come after the move is made.
Hopefully this blog has given you the guidance you need, or at least the beginnings of the direction necessary, to start honing your stock trading and investment strategy in order to maximize your return.
Now that you’ve absorbed these teachings, we hope that you also decide our tips are good enough for your children – the next generation of young investors and money makers. In that case, we also want to take our content off of the page here and remind you that Explorer Hop offers an internationally-acclaimed learn to trade program for children in grades 7-12. In this program, we take children on a journey to understanding everything they need to know about investing and trading. We’ve got your child covered from every possible angle!
Check out our website for more, here, and be sure to keep an eye out for part two of this series – how to know the best time to sell a stock – coming soon!