When you’re starting your investment journey, you’re likely to start by looking into various stock options and deciding which ones to invest in. Over time, you grow your investment portfolio by investing in a variety of diverse stocks. Once you’ve established your portfolio, though, it’s time to take it to the next step and start trading and making investment decisions.
If you’re new to the investment world, it can be difficult at first to decide which stocks to sell and which to hold. The best stock trading apps available allow you to buy and sell stocks freely with just the click of a button. Ultimately, though, how long you want to hold on to your various stocks is very unique to each investment.
If your stock is performing badly
If you notice your stock has gone down over the course of the week, don’t panic yet. A stock that has decreased in value recently does not necessarily mean it’s time to sell the stock.
Stock values increase and decrease on a regular basis in response to a variety of triggers. Sometimes, stocks will tank across the board in response to world events, like a presidential election or an international conflict. Additionally, stocks will fall temporarily in response to company-related events, like a new CEO.
Short-term poor performance for a stock is not the right time to sell. You may end up losing more money in the long run, as these stocks are likely to return to normal and restore their value to the amount they were when you bought it.
However, if you’re noticing your stock is performing poorly for a long time, it may be time to cut your losses and sell. Companies that are experiencing repeated turmoil or approaching bankruptcy are not very likely to recover, and it is best in these instances to sell your stock so you can maintain some of your investments.
If you’ve just bought a stock
As you’re learning about stocks that are predicted to perform well, you may be influenced to purchase them for yourself. Sometimes, though, stocks that are predicted to yield high returns don’t always end up earning much money.
If you’re noticing your new purchase is not yielding the returns you expect and you want to sell, hold off for a little while. You need to give your stock time to grow and gain traction in the market to be able to yield the monetary return. While there is no specific amount of time to hold onto your investments, you will want to hold on to your new stocks for at least a year before considering selling.
If your stock has recovered in the past
Nearly all stocks are likely to experience a dip at some point. Companies and industries change, and experience growing pains and issues from time to time.
If you’re noticing your stock has dipped for a long while, you may be tempted to sell. In some cases, this is a good time to make the move, but before doing so you will want to consider the overall history of the stock.
Some stocks that have dipped in the past have also experienced exponential growth afterward. Before you make the firm decision to sell, take the full history of the stock into account to determine if this is something the company has recovered from before. In these instances, try to wait out selling for a bit longer to see if they experience a recovery again.
As you’re becoming more active in your stock trading, be sure to look into the best trading stock apps available to help you make more informed buying and selling decisions for maximum returns.