Welcome to part two of our little miniseries on timing and stock trading/investing.
If you haven’t read part one yet, please click here to read about how to know the best time to buy a stock.
Following up on part one from two weeks ago, today’s blog will provide some tips and tricks on how to know the best time to sell a stock.
Here we go.
Selling a stock comes down, in the simplest of terms, to knowing the point at which you can maximize the return. After all, that is the very core ideal/goal of stock trading and investing – maximizing the return or profit that you “take home”.
According to Investopedia, the best time to sell a stock would be around the five days surrounding the turn of a given month. That is typically when stock prices are at their highest, but of course, this is not a hard and fast rule. Stocks, much like any investment, are a malleable and fickle thing that can be unpredictable at times and rely on good research for success.
Of course, however, there are certainly still some recommended practices we can share to give you a head-start on this journey.
Looking at expected price targets, for instance, is a strategy many investors use to know when to sell a stock. A price target is an analyst's expectation for the future price of a stock after a certain time period, typically a year or 18 months. This can be a good indicator of when it is an appropriate time to sell a stock, as this number is often a signal to investors that a particular stock has reached its financial “ceiling” and profit may be maximized if sold at this figure.
Otherwise, setting a price target yourself and selling a given stock when it reaches that price target – which you can decide based on what dollar figure would satisfy you as a profit based on what you bought the stock for originally – is another good way to know when to sell a stock, but again, this all comes down to one key word of the day: research.
The most successful stock traders are often those who are most diligent, those who take the most time to do the in-depth research necessary to invest and stock trade with a truly high degree of consistent success. We hope you take these tips as a starting point for your own research into stock trading and investing so you can turn yourself into the next great investor extraordinaire.
We hope that 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 again hope that you decide our tips are good enough for your children – the next generation of young investors and money makers.
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Happy learning and good luck!