At the time when the capital gains on the investments made, it is normal for savers to consider whether it is the right time to sell, or on the contrary to wait for the benefits to be more bulky. To define this approach it will be necessary design a strategy that delimits the objectives of the investor. Depending on your profile, terms to which it is directed and the capital contributed. Not surprisingly, in most cases they will determine the answer to this investment approach.
In situations of upward trend, the most prudent thing is to continue with the investment until obtaining better prices in its quote. Or until they appear signs indicating the completion of this process, even with the risk that the gains obtained so far may evaporate.
To make as few mistakes as possible, it is highly recommended that you select a formula that combine safety and risk as a strategy to preserve your capital. Especially in the bearish periods which is where it is much easier for the state of your investment portfolio to be reversed. To the point of reaching negative positions, where it will be really more difficult to undo the positions in the equity markets.
Capital gains: Set goals
Above all, you will have no choice but to set goals that you can assume from the beginning. Don't do it under overly optimistic intentions, and with signs of not prospering. It will be a mistake to foresee few achievable goals with profits above the usual in this kind of operations. Another very useful guideline for these situations is to establish investment terms for the operation: short, medium or long. And based on this parameter, apply a successful investment strategy.
Close positions in the stock market
When your positions in equities are always winners there is a temptation to sell the shares quickly. But, is it correct is the action of the investors? It will depend on the criteria by which you guide yourself in managing your savings. Not surprisingly, in situations of strong financial or stock market instability it may be the best decision you make, above other more aggressive positions.
But this scenario does not always occur, and in the most favorable ones for your interests (under an upward trend, or even neutral), you will be wrong if you close the positions with some diligence. More experienced investors in financial markets are more in favor of run the benefits above other considerations. As long as you set yourself a few minimum objectives in stock trading.
A little trick to act in this way is to look at the highs of the price every week. So that the moment be decreasing, make a decision and leave the positions immediately with all the benefits accumulated up to that moment. It is one of the most reliable strategies to make a decision of these characteristics. Fundamentally for investors who direct their investments in the short term.
Short terms may not go with your usual form of investment. But on the contrary, it is intended for the medium or long. In this case, you will be able to assume losses in the first months, since your expectations for economic growth will be set at 5, 8, 10 or even more years. You will not need to be aware of the daily quotes of the securities you keep in your investment portfolio. If you carry out this operation every so often, it will be more than enough.
When should you undo positions?
Whatever the status of your investments, there is a scenario where you will have no choice but to close the positions you have open in equities. It will be the precise moment where the quotes break some significant support. It will be a clear sign that you have been confused in your approaches. And there will be no choice but to undo the positions. With a very clear objective, which is none other than to prevent you from losing more money in the financial markets.
Another aspect of great interest for your operations on the stock market comes from the beginning of downward movements, after having achieved capital gains in stock operations. Surely you want to close the operations even with minimal profits. The risk derived from this strategy is that can deprive you of possible uploads in the coming months, which lead you to increase your profits, even considerably.
Well, this delicate problem would be solved by analyzing the technical aspect of the value. Surely it tells you that it is not yet the right time to sell. Not in vain, you may be in a position to obtain more benefits in the next trading sessions. Anyway, it is a decision that only depends on you, and of the profile you present as a small and medium investor. With different strategies in each case.
Operations expenses
At the time of quantifying the possible profits of each stock exchange, it is not only necessary to look for the difference between the purchase price and the sale price. But you also have to add commissions that each stock exchange operation has, as well as those of custody and, of course, the amount that is destined to the Treasury. It will be the most objective way to calculate the true profitability that you will obtain for the investment.
Some cases may be even minimal, and in others you cannot even cover the expenses of commissions and taxes. As your earnings increase, the impact of these disbursements will be noticeably diluted. You can even better adjust sales operations to achieve your desired goals.
It is highly advisable that you opt for one of the many offers that financial institutions have enabled to lower these expenses. Not in vain, you can save up to 20% on operations. Without giving up anything, or any service. It is common for them to even present free transfers in investment portfolios from other banks. Where they come to offer cash, which can reach around 1.000 euros.
When should you make the decision?
It will be one of the most decisive moments in your future as an investor. However, it has the disadvantage that it is not known when to make the decision. There are many doubts that will cross your mind, in one sense or another. To the point that you will doubt they are the convenience of the orders that you have sent to the financial markets.
You should not do it out of financial necessity, far from it as a solution to face other expenses of your domestic economy: the children's school, the overdue bills or any debt before third parties. Not surprisingly, this scenario can seriously harm your interests, and much more than you initially think.
To invest better you must be in a more or less buoyant economic situation. This is attested by some small investors who have made very bad operations in equities due to liquidity problems in their current account. They have come to lose money in their movements after having been their investments in profit.
It has come that you are the one who has to elucidate these approaches that we have exposed to you in this article. It will not be an easy task, of course, but with a little will and some experience you will be able to achieve the objectives in a not excessively long timeframe. Hopefully, from now on you will be in a better position to optimize equity trading and earn capital gains.
Eight tips for investing
From now on it will never hurt to import a series of simple guidelines for action that will have as a priority objective to elucidate what is the most convenient moment to exit the financial markets with capital gains, even if they are minimal. Or, on the contrary, wait for the quotes to go to more advanced positions with which to make your movements in the stock even more profitable. Basically they will be the following.
- Never sell in bullish market situations, despite being with capital gains. Especially when the graphs and figures of the same indicate that the revaluations may continue during the next sessions.
- Analyze the weekly highs and lows because they will give you a correct clue about the trend of the values during the following trading sessions. In this way, when the weekly highs decrease it can be the signal to get rid of the buying positions.
- Raise some logical objectives and consistent in taking positions, depending on the term you want to address: percentage of profits, losses that you can assume, etc.
- Ir accumulating positions as the upward movement consolidates and, conversely, undo positions depending on the price losing strength in its daily prices.
- When the selling pressure is higher than the buyer it will be time to move away from the equity markets. Leaving aside any previous strategy and, despite the fact that the capital gains generated are very small.
- Decant for bullish values because they will always give greater assurance that the profits can continue their course. In any case, you should be vigilant for any alarm that indicates that stock prices have peaked and the trend, therefore, can change in a few days.
- Any notable event or fact can ruin your aspirations in investment. You will have no choice but to be very agile and anticipate in the movements.
- And finally you can't forget that it is preferable to earn a small amount to be burdened for the future. These situations have been suffered by the vast majority of investors, even the most expert in stock market operations.