In case of short term investments that are held for trading, it is highly important for an investor to know whether he should sell his investments, hold them, or whether he should acquire new investments. This decision may not be easy to make and there is always some risk involved, but there are certain factors that can help an investor make this decision. The historic market performance of the company is the biggest indicator of the prospective performance. Therefore, the trend in the market performance of the company can help an investor make this decision.
Following are the factors that indicate when to buy, sell, or hold the investments:
When to Buy
Shares can be bought when the company shows very promising financial performance in the future periods. Mostly, when the share price of a company is low and the company releases exceptionally promising financial results, this may set the share price on an upward track which may go on for a substantial period of time. Therefore, this may also be an opportunity for the investors to buy the shares in the company. Recent examples may be the stock of Qualcomm. The stock of the company was undermined due to the lack of the company’s ability to meet its demand. However, as soon as the company announced favorable financial results along with the disclosure that the supply chain issues have been dealt with, the stocks of the company were revived. This gave the investors an opportunity to buy the stock to earn high returns in a short term. Continue reading