What is the right time for profit booking in the stock market?
It's just as crucial to make a profit on your investment as it is to make the investment. It's critical to understand all of the factors that can influence market movement, as well as the equities you hold, while investing in stocks.
There are four major instances in which investors should not hold off on taking profits. Some of them are as follows:
Firm-specific news:
Any favourable news about the company, such as a business expansion or a new product launch, creates a positive market mood toward the stock. Investors will buy more shares than normal as a result of this optimistic feeling and the stock price will eventually climb. When the stock price is high, it may be possible to fulfil the investment goal by selling the shares.
Pfizer, as a recent example, saw a significant price increase following news that its corona virus vaccine had proven to be more than 90% efficient in preventing infection.
Earnings indicator:
Keep retaining the shares if the company's quarterly results are solid and ahead of expectations. Consider lowering your holdings or selling the stock if the underlying variables alter in such a way that they can affect business operations. Furthermore, when better alternatives with the potential for higher
News specific to the sector:
The recent RBI announcement that risk weighting for new home loans sanctioned up to March 31, 2022 has been rationalized and linked to loan-to-value (LTV) ratios has encouraged home loaning businesses. The improvement in profitability and its beneficial influence on the market valuations of these lenders were instantly factored in by the market. Due to this bullish sentiment based on the expectation of a surge in home loan demand, these companies rallied smartly. If there is any doubt about the rally's longevity during such sharp rallies, one can book profit. Returns become available, one should sell a stock.
Economic Indicators:
Economic data is crucial in determining market movement, and it can serve as a signal to book profits. Positive economic data boosts investor confidence, whereas negative data undermines it. Investors are compelled to sell shares at present market prices due to poor data. When a person sells stock at the present market price, he or she effectively locks in gains and protects oneself from financial loss.
To be able to record profit at the correct time, it is critical for an investor to be educated and conduct thorough research. By booking profit in a well-planned and timely manner, an investor can earn the maximum returns on his or her investment.
Also, when earning a profit, only a small percentage of the investment should be cashed, since this might provide two benefits. First, an investor can lock in a profit on a portion of the investment, and the balance will continue to increase. Overall, the most crucial aspect of all of this is the timing.
Stock broker firms in India
India is the most rapidly growing economy in the world; this makes Indian stock markets promising and an opportunity hub not only for domestic investors but also for foreign investors. In this article, we shall have an overview of the Indian stock exchange and how investors can make money by investing in the market.
Best indian stock broker : Indira Securities is one of the leading Stock broker firms in India. The company offers flexible plans to its investors and traders community which helps them save on brokerage. Moreover, there are special plans to cater to online trading requirements of its clients dealing in Equities, Derivatives, Futures and Options, Currencies, and Commodities.
Best indian broker for stocks : Some of the features offered by Indira Securities which makes it the first choice of investors and trades include:
· Lower Securities brokerage charges
· Simple brokerage structure
· Prompt customer care service
· No hidden charges
· Robust online and mobile trading application
· Ease of open demat account online
Open demat account online and start your trading journey with the best full-service providing brokerage firm in Central India.
