3 Questions To Ask Before Buying Or Selling A Stock
July 22, 2016
3 questions for any stock market decision
What are 3 questions to ask before buying or selling a stock?There could be more than just 3 but here are the most basic to start with.
1.What are the fundamentals
2.What are the technicals
3.Is it the proper timing to buy or sell
As major US indices are now at very high prices making daily even new highs some caution is required. If you make your research and find some overpriced stocks then maybe it is a good time to sell if you have compelling arguments that support your analysis.
If you plan to buy some stocks then more caution is required. Waiting for lower prices,after a small or larger dip or correction seems more reasonable.
And timing is so important in any decision. You may be correct in your analysis but bad timing may stop you out. Be patient.
Another factor to consider is the risk reward ratio. If lets say you aim to risk 3% on your capital to gain 6% or a 2 risk reward ratio which is good then timing is even more important than first 2 questions. Waiting for good levels to buy or sell is all about timing and patience.Stock market offers opportunities.Just be patient.