When a person wants to remain invested in stock markets there are a few things that need to be considered.It is important in Share trading to Sell shares at the right time as it is to buy shares at the right time. Traditionally and historically Bear markets can run for anywhere between 13 - 16 years...
Bears and Bulls
According to Trade analysts and Economists traditionally and historically Bear markets can run for anywhere between 13 - 16 years.But, of late things dont look so bad.However, this very fact makes it even more volatile and scary for a first timer wanting to be a part of the stock market.
It is important in Share trading to Sell shares at the right time as it is to buy shares at the right time.An Investor has to keep a target price and sell immediately when the price is reached because market trends are highly unpredictable and one can never be sure as to when it would take a dip ! This is also true of keeping a stock loss .
When you get caught in a downward trend it is best to take advantage of the situation and buy shares in which you are already invested in.The lower prices help us cushion any losses suffered due to the downward trend.Taking the fundamental conditions of a stock is very important when one wants to invest in shares.One has to identify the risk and adhere to trading rules.One should remember to take small gains and also small losses- this way you don't lose a lot of money.
When the bull rally begins one should be willing to buy back good shares at higher prices even if you have sold the same shares at lower prices .Technical analysis is an important tool in stock trading. Being informed about the shares and their movement and trends (upwards or downwards ) help the investor to either sell or buy.These movements can be due to many factors like bad performance of the company or certain rules and regulations that could adversely affect the stock in the near future.
However, we see that certain stocks remain bullish inspite of the bearish market outlook. Such blue chip stocks normally perform well all the time without too many ups and downs.Over long term, stocks are definitely more attractive than fixed income.But they can be risky in short term perspective, this is because stocks correct from time to time and one has to be patient and take the opportunity to buy more shares at such times. A bear market is a buyers market and when there are more buyers than sellers the trend gets reversed and we see a bull market.
Once a certain level is reached markets also need to consolidate and then either move up or down depending upon the technicalities and this is when an investor needs to be very careful.Most Global markets depend on one another and any weakness in one can affect the others either positively or negatively .
So, finally when a person wants to remain invested in stock markets there are a few things that need to be considered
1, Always make it a point to spread your investments.Never buy large quantities of one stock only.
2, Buy quality blue chip stocks that have been steady and have been there for a long time .
3, Follow the stock movement regularly and add on when the price comes down. It helps to be well informed about the stock market at all times
4, Keep a fair price target of 30 - 40% and when that target is reached sell at least a part of your shares. This way ,you can sell some more if the prices go further up or buy back the shares when the prices come down.
5, It is very important to distribute your portfolio and risk factor by buying different kinds of shares
For example :- Pharma,Finance,Crude,Tech,Oil,Textiles,Cement etc...