When to buy, when to sell

When it comes to investments, if there were a simple answer to the question of "when to buy and when to sell" then everyone would be making money all the time.But unfortunately no one knows how the market will turn from one day to another.It is impossible to know exactly when it is in your best interest to buy or to sell.However, there are ways that investors are able to make educated guesses.

When to buy

Buy when you judge that the value of the stock is going to increase.It is when you buy a stock before its value increases that you let your money work for you.Buying stock before it's value increases dramatically is not an easy thing to do.You either have to have excellent business sense or a crystal ball.For example, when Bill Gates first starting offering Microsoft shares it was an excellent time to buy.Back then you paid a fraction of the cost of what a Microsoft share is worth now.The problem is that you never know what is and what is not going to be a sure bet when it comes to increases in the value of stocks.

When to sell

Sell when you believe that the value of a stock is going to decrease below a point where it remains valuable to you or to a point that you perceive that the stock will never be at a value higher then where it is dropping from now.In other words, sell when you do not believe that that investment is going to continue to grow.An example of when you should sell is when you believe that the parent company of the stock is going to have a dramatic decrease in income.Rumors of bankruptcy are excellent indicators that the stock holders of that company will be trying to sell off their shares in the company in the hopes of escaping a bad financial situation with as much of their initial investment and profits as possible.

Get help

Most people who are not able to dedicate hours and hours every day to the research of companies to find out how to best anticipate the market, are going to have a difficult time accurately making predictions of when to buy and sell.This is why most investors get the help of investment brokers and firms.Investment brokers and firms dedicate their days and in some cases nights to studying the market and making the buying and selling decisions on your behalf.In addition to having the time and manpower to work on your investments full time, an investment firm offers the benefit of experience in the market.After all, those who work at investment firms have a history of knowing from first hand experience what buying and selling decisions are best.Experience like this cannot be learned from any text book or article.

Yet, even the expert brokers and firms are not right all the time.This is why investment portfolio diversification is so important.The world of investments is risky.You counter act that risk by deciding to buy some of the safest investments possible to protect yourself from bad trading decisions. Knowing when to buy and when to sell is the name of the investment game.The uncertainty of it all is what makes some of the most unlikely people very rich and unfortunately the opposite is true and those who do not know when to buy and when to sell can end up loosing everything that they have invested.All that you can do is to study out your buying or selling decision in the best way that you know how and then to hope for the best.