New Delhi. There are three stages of investing in the stock market. First choose a good stock, second buy it and third sell it at the right time. However, new investors do not pay much attention to the third part and as a result they have to face huge losses.
What is the right time to sell shares and why investors are not selling shares even after taking losses, today this article will tell you about this.
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right time to sell shares
There is no one fixed time or circumstance for this. Rather, there are many such situations where you have to exit the shares considering the market. Magadh Capital CEO Vipul Prasad writes in Mint that there are 5 situations where investors should sell stocks. First, the stock has crossed its price point from where it is now getting overvalued. That is, the share has attained its rightful value. If you still stay invested in the stock then you may have to face the downside. There is another circumstance where you will come to know that you have bought shares on the basis of impulse or wrong guessing. Investors sometimes do this deliberately to challenge themselves.
other three circumstances
The third situation is a change in the head of the company or any acquisition. The company in which you hold shares and there is a major change in its head or the company is exiting any business or making any acquisition, in such a situation, there may be a decline in the shares. Fourth, some change in the market sentiment after you buy the shares. If SEBI has made some regulatory changes which are adversely affecting the company whose shares you are holding, it is still a position to sell the stock. Fifth situation, when you see some other good stock for which you need funds. Even in such a situation, you should sell the existing shares, from where you are getting average or negative returns.
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Why investors don’t sell shares
According to Vipul Prasad, the biggest reason for this is pride. Investors do not want to incur losses, so they do not sell the shares. Investors forget that buying, holding and selling shares should only be done keeping the future in mind. Both the purchase price and the selling price of the shares should be seen separately.
Tags: BSE, stock market, Success tips and tricks
FIRST PUBLISHED : June 24, 2022, 11:51 IST