Many inexperienced investors go public to buy shares of companies, which they often get rid of at the wrong time. As a result, they will lose money by selling their securities for less than the prices at which they bought them, when the initial objective was to achieve a capital gain. To avoid making this mistake and to ensure that they earn a minimum of money, scholarship holders should have several rules and “best practices” in mind.
Placing your money on the stock market is a risky bet, the invested capital is not guaranteed. Part of the way to reduce risk is to learn to manage your emotions, which should not override reason. “Most people who do not make money on the stock market, it is because they do not know how to hold their positions and wait for better days to sell their securities. To find out more real estate co-investments in Singapore, check out https://www.realvantage.co/.
Avoid acting by mimicry
We must therefore not panic when the markets begin to fall, or even tumble, as during the stock market crash of late February-March 2020. At these times, it is imperative to be patient and not to adopt a sheepish behavior, by selling its shares by imitation.
“It’s when things go up that you have to take your profits. In other words, you should sell your securities when the markets are having a good time and are going up. “When you’re above the long-term statistical data, it’s often the time to step out.” In this case, there is no need to hang around to sell your securities and risk the prices falling – rather than hoping that they continue to rise.
You are also not required to sell all of your shares at the same time. It is even clearly not recommended. First, it is recommended to sell the securities of a company whose value is “too high” on the stock market compared to the real economic value of the company. “It is in your interest to sell to redirect cash towards more promising investments.
Gradually sell your titles
Second, it’s important to desensitize your portfolio as you approach your investment horizon . This means that you have to withdraw your money as you go and invest it in assets that are less risky than stocks, as the maturity date you set for your investment approaches. “It’s a way to avoid suffering a crash.
This desensitization can take place over several years. However, if you have sufficient resources elsewhere or you can call on credit when you need liquidity, it may be wise “to stay invested, to let your equity portfolio capitalize. The stock markets offer a solid performance, if only through the effect of the capitalization of dividends,” he underlines.
Finally, it is above all your personal needs that should dictate your choices, and not macroeconomic forecasts because even the managers of the largest funds do not always manage to anticipate trends.