Stock Trading- Red Flags To Look Out For Before You Sell

© John Efetobor. All Rights Reserved

The primary motivation at the back of every investors mind for buying any stock is profit, whether you choose to sell immediately or wait for a longer time before you sell to access your profit is a matter of choice, a decision I think you should take responsibility for instead of leaving it in the hands of your broker.

There are clues ever present in the capital market that tells you when to sell your stock, when fully understood can save you from loses and can also make you get the benefits for which sake you invested your money in the first place. You have to constantly be on the look out for these red flags or signs that remind you it is high time you bail out of certain stocks in your portfolio,

Let's get you started, shall we!

SELL WHEN YOU REACH YOUR TARGET PRICE

Before you buy any stock, you must settle in your mind by reason of sound facts available to you a target price that you intend to sell your stock for an appreciable return. When you reach your projected price, once you reach your objective that is the best and most reliable time to sell.


SELL WHEN YOU OBSERVE FUNDAMENTAL CHANGES

Changes that affect the fundamentals of a company must be taken very seriously. When you observe that the fundamental of a company is weakening or depreciating in terms of profit capacity, when a company profit potential has reached its peak and it starts declining is time to consider offloading your shares in such a company.


SELL AFTER THE CLOSURE OF REGISTRAR

If you are a stock trader, one who buys and sells stock actively in short durations; you might consider selling after the closure of registrar. If your goal of dividends and possibly bonus scrip in a company has been achieved, in other words, you bought into a stock because you want to avail yourself of dividends and possibly bonus, after closure date of registrar is a good time to sell, because other stock traders like you will also be selling which can cause the price of the stock to rally down.

The bottom line of stock trading is acquainting you with the appropriate time to buy a stock and the most suited time to sell, that in my humble opinion is the crux of stocks trading.

Stock Trading- 5 Kinds Of Investors

© John Efetobor. All Rights Reserved

Investing in stocks is an art that has gained tremendous acceptance in recent years globally. Today, many a investors do trading online employing the services of stockbrokers via the internet, there are those that depend on online robots programmed to buy and sell stocks depending on trends per time. A vast majority of investors do offline investing which is more accepted, most investors are at home with offline investing since they are able to monitor almost directly their portfolio with their stockbrokers.

Generally, whether you do online or offline stocks trading, investors fall into five categories and they see stock investing from different perspective which I shall be highlighting in the course of this article. So let’s get you started, shall we?


SENTIMENT DRIVEN INVESTORS

The first kind of investor that form the bulk of the investing public are sentiment driven stock investors. These are men and women who depend on rumors, hype, manipulated articles of investment stock reports on some investment newspapers and magazines relating to specific stocks and the prediction of so-called experts for their investment choices.


EMOTION DRIVEN INVESTORS

Emotion driven investors are those who are emotionally attached to:

1. Certain stocks because they made profits from such previously

2. Certain stocks because they fall into a sub-sector or industry for which they have soft spot for.

3. Certain stocks because they have fallen in love with the products or services of the company.

4. Certain stocks because of their temperament and beliefs.



TRADITIONAL DRIVEN INVESTORS

Traditional driven investors are folks whose minds have been moulded by long years of outdated trading patterns that are no longer relevant in the present times of jet-age information. They refuse to accept modern sophisticated stock trading trends.

KNOWLEDGE DRIVEN INVESTORS

Knowledge driven investors do Intelligent Stock Trading. They are those who by reason of knowledge and understanding gained by consistent personal education in stock trading trends have been able to reduce risk to the barest minimum. Knowledge driven investors take responsibility for their trading actions and decisions; they don’t entirely leave their stock picking choices in the hands of stockbrokers. They have a direct input in the direction of their portfolio; they see the input of a stockbroker and analyst as complementary rather than authoritative.

In conclusion, I submit that with what is obtainable worldwide as far as stock trading is concerned, it will be of tremendous benefit to you, if you can spare some time and money to invest first in stock trading education, because in the long run, you shall be better off for it.

Stock Trading- 5 Kinds Of Stocks You Must Understand

© John Efetobor. All Rights Reserved

Basically there are two groups of stocks, preferred and common stocks. Preferred stocks are comparable to bonds because their returns are fixed. Preferred shareholders get first dibs on dividends in good times and in assets if peradventure the company goes under. In other words, the risk of a preferred shareholder is limited, they are mainly interested in dividends. Very few companies issue preferred stock.

When investors talk about investing in stocks, they are referring to common stocks. The vast majority of investors are found in this class, common stockholders take on a few dimension of risk compared to preferred shareholders though common share holders command more voting power at annual general meetings.

The five kinds of stock in discussion fall under common stocks. An understanding of these stocks will greatly enhance your stock trading prospect. I don’t know your goal when it comes to investing, one thing I know however is that you will be able to find one among the five stocks that fits your goal and temperament.

GROWTH STOCKS: Are stocks with great potentials for growth, they grow faster than the economy and sometimes than the stock market itself more often than not. The risk level is minimal; investors are attracted to it because they have good earning growth over the long run. Investors in this stock know that over the long term their portfolio is secured.

INCOME STOCKS

Investors who buy into this kind of stocks do so because it doles out a large portion of its profits. Income stocks pay as much as 60% to 80% to investors as dividends compared to other stocks. Income stocks are almost immune to changes in the market because investors are confident that they will receive dividends.


BLUE CHIP STOCKS

Derives its name from the poker game, the blue chips usually have the highest value. They are sector or industry leaders. They are big companies that have been around for a long time, they have strong fundamentals. They pay steady dividends and most times bonus scrip. Though their prices don’t grow very much, they are good options for retirement portfolios; they are best suited for the long term.


VALUE STOCKS

Are under priced stocks that have great potential for growth; look at it this way, value stocks sell below their real value which makes them very attractive. If you compare the low price of value stocks to its earnings, you will understand why stock traders are attracted to it. They are good options for investors interested in growing their portfolio.


RECURRING STOCKS

These are stocks whose performances are affected by the swings of the economy. When the economy goes up or down a recurring stock responds likewise. Their performance depends on the dictates of the economy; therefore, the best time to invest in recurring stocks is when the economy is performing well.

Your investment options ultimately boils down to you knowing what your goals are in the first place, that way you can hold a combination of these stocks in your portfolio for the purpose of balance.

Factors responsible for bear market

© John Efetobor. All Rights Reserved

The bear market is the interval in the capital market characterized by falling prices for securities. It is a period that separates the men from the boys in the art of stock trading; it is the season when investors who are unsure of the reason why they hold a stock sell out of panic. It is a period when most of the prognosis of stockbrokers and experts are thrown into the winds and are torn into shreds. I am amazed at the way most investors are taken unawares by the bears; it ought not to be, because there are always loud signs that always herald a bearish season, unfortunately, only the seasoned stock traders doing Intelligent Stock Trading. that are able to see them afar off.

I want to show you warning signs you should look out for, that should prepare you before the bear market sets in, remember there will always be a bull and bear market as long as the forces of demand and supply continue in the capital market.


Massive profit taking

Profit taking is the name of the game; stock traders generally look forward to selling off their stocks once their objective for buying into a stock is achieved, but when this action is carried out en masse it can trigger off a bearish session. During the bull market stock traders take advantage to sell of their stocks, the massive shedding will eventually have its toll, so watch out when you observe there is massive effort by stock traders to sell their stocks, know the bear market will come knocking.


Active and prolong primary market activities

The primary market is the other half of the secondary market, both markets function in diverse ways. The primary market is where the vast majority of investors do business, the reason is not farfetched; it is an all comers market. For this reason whenever there is prolong activities in the primary market, in other word, if there are so many initial public offerings and private offerings, investors will channel their funds to the primary, sometimes they may even withdraw their funds, the effect there will be more sellers in the secondary in the secondary market than buyers, supply will outperform demand thereby driving down the prices of shares.


Massive panic selling by emotion driven investors

One of the feature of a bearish a bearish market, is the reaction of emotion and sentiment driven investors. The bearish season over the years from my experience analyzing and trading stocks have always beaten uninformed investors who have not imbibe the entry and exit strategy that I know has most of the time protected wise and seasoned stock traders. When the vast majority observes that the prices of stocks are rallying down they react by selling off their which affects the stability of the secondary market.

The bear market when fully understood can be a great opportunity for wise and seasoned investors to create wealth. Remember during the bear market, you can easily find stocks which had been hitherto scarce and expensive available and affordable. During the bearish market, you will find securities with very sound fundamentals selling below their real value, which means if had prepare yourself in anticipation of a bear market by your understanding of the activities discussed above, you could be your way to making awesome profits.