There is no doubt that one of the most sensitive moments in investing is when you have to sell your shares in the financial markets. To the point that you doubt on whether the best moment to formalize these movements in equities. Or if on the contrary it will be very beneficial for your interests to wait a few weeks to undo the positions. In any case, sell in bag It always tends to create the odd headache as it is a very sensitive operation, due to various circumstances. As you will be able to verify in this article.
A more than relevant factor to sell the shares is derived from the positions in your movements. Because in effect, it will not be the same to be in clear capital gains than if you have accumulated heavy losses since the purchase of the shares. Because the investment strategy that you must use in each case will be completely different. It is convenient that you take it into account from now on if you do not want to make mistakes of special importance. And of which you can regret in a few hours.
Selling stocks in the financial markets is not easy or straightforward. To do so, you will have to import a series of objectives into your approaches from the beginning. Without you, you will not have lines of action to protect your interests as a small and medium investor that you are. To the point that this will be your main strategy. It will help you, not only to make your savings profitable, but most importantly, to protect them more effectively and decisively.
Selling on the stock exchange: influencing factors
Of course, many things can go through your head before executing sales in the financial markets. A first, that it is a good time to do them at this precise moment. Do you want to know the reasons? Well, applying the Anglo-Saxon saying of "sell in may and go away" you can reach a definitive conclusion. Because it means that a large part of the increases for the year have already been achieved. And you may have to wait until the end of the year to take advantage of other increases of similar intensity. Specifically, those derived from the rally at the end of the year.
This saying may not always hold true. But in any case, we are starting a time of year that is not very favorable for taking positions in the equity markets. As has been shown in recent years. So prudence should be the main common denominator of your actions. Above other kinds of valuations and however important they are. Don't forget it if you don't want to make a particularly serious mistake. Because you can pay very dearly with the depreciation of your portfolio.
Of course, if fatigue is taking over some of the values you have in your portfolio, it will be the definitive moment for you to change your strategy. Because in effect, you will have no choice but to restructure it to improve your positions in equities from now on.
Not having a defined strategy
Another factor that can tip the balance to develop a performance based on partial or total sales is not having a defined strategy. Even with capital gains in the securities portfolio, if you have not defined your objectives, it will serve as the perfect excuse to exit the financial markets. So that in this way, you can enjoy the benefits generated in whatever you want. From paying for a trip with your friends to satisfying a little personal whim. It may be time to consider these actions.
Nor can you forget that a lack of definition in the objectives can be the warning about what may happen to you. Faced with an unexpected trend change in the equity markets. Not surprisingly, many things can happen and not all of them positive. Improvisation will only cause problems for you from now on. Therefore, you should not rush the operations. Because in effect, you can happen what you least expect and lose part of your personal assets.
To avoid all these problems, you will have no choice but to import a line of action that is very well defined. And of course that is adjusted to the profile you present as a medium and small investor that you are. It will be the easiest shortcut you can take to achieve your goals. Even above other considerations from the point of view of technical analysis. You just have to have the will to carry out with determination.
Investigate the status of securities
It may even happen that although your sales are growing, it is not the same with your profits. And the next posting of your accounts could trigger sales. With the risk that this fact can produce on your savings. The best way to avoid this dangerous scenario is through a forecast in your income statement. Not surprisingly, you have enough information to undertake these operations. If this is the case, it would be best to exit the equity markets to wait for better business opportunities in the coming months.
The forecast in equities generates a lot of profitability. And in this sense, it is highly advisable that you anticipate to improve the real state of your securities account. You will certainly be able to gather all the information about the situation of the companies where you want to invest your savings from now on. You will only have to dedicate some of your time, but with the assurance that it will be something that will be worth it. Especially when you formalize sales in the financial markets.
In trend changes
Undoubtedly, a change in trend in securities or stock indices will be the definitive signals for undo positions quickly. Whatever the real status of your investments. Among other reasons, because during the next few days the value of your shares will depreciate. Even if at that precise moment you are at a loss. It is always better to undo positions with as few as possible. Because they can increase, even more violently than expected.
If you are going for a longer term of stay, you have an alternative strategy. It is none other than make partial sales when the change in trend finally occurs. It is something that investors with more experience in the financial markets do. On the one hand, you keep your positions in the stock. And on the other hand, they manage to have some liquidity in their checking account when the most adverse scenarios for equities arrive. Not surprisingly, it is an intermediate course of action. Above all, try to protect your interests above other highly relevant valuations.
The trend changes should be entities as business opportunities. Yes, they serve for redirect your investments towards other financial assets. It will be the most appropriate pretext to change your investment strategy and vary your positions. To the point that you can lean towards another series of financial products. From investment funds to the most sophisticated such as warrants, credit sales and in very specific cases even derivatives or future options.
What to do in the absence of liquidity?
One of the biggest problems small and medium investors have is meeting their liquidity needs. To meet your expenses, tax obligations, children's school and any other unexpected expenses. To avoid problems settling in your portfolio, nothing better than investing only that amount that you will not need for many years. Or failing that only a part of the capital destined to the stock market. With these systems you will be in a better position to correct or limit your financial problems.
Because in effect, no one could make you invest your money in equity derivatives. Not much less, since any monetary incident can cause you at the most unexpected moment. Under no circumstances should you keep your checking account balance low. You should always anticipate the expenses you will have in the coming months. They are many and diverse in nature. In any case, you must analyze them to reveal the amount that you can allocate to the world of money.
From this general scenario, you should not be aggressive in your investment approaches. Not surprisingly, good planning will be the best guarantee on the viability of financial operations. You will surely meet someone close to you who has invested all of his savings. A serious problem that will have brought them more than one negative consequence. You must learn from these cases and not repeat them in your own person. It is one of the lessons you should learn in the stock market.
You must bear in mind that there are banking and financial products that are very affordable for all households. From financial contributions from 1.000 euros. Such as investment funds or term deposits linked to the stock market. Perhaps it is the solution so that you do not have problems with your personal budget from now on. And you can even generate an interesting return on your savings. Don't forget it if you don't want to make mistakes in managing your money. To the point of being one of the biggest problems that small investors have.