What all factors to consider before selling stocks

Buying and selling stocks at the right time requires skill and one needs to understand the working of a stock market to master this skill. Just like buying the shares, selling them at the right moment in the market is also crucial, as the selling price decides the profitability/loss from one particular share. The selling and buying price of the shares mainly depends on the market demand.

There are two types of speculators who operate any stock market: Bear and Bull. A Bear speculates the stock prices would come down, whereas a bull investor expects the prices of the particular share would go up in the future. Bear speculators involve themselves in short selling of stocks, where as bull investors don’t indulge in such activities. The selling price of a stock mainly depends on the price fluctuations in the stock market. Most of the investors who operate in the market are speculators who control the pricing of a particular stock. However, there are some factors which one needs to consider before selling stocks. Some of them are as follows:


  • The financial result of a company plays a key role in deciding its price. If the company is in good shape and has earned reasonable profits in the previous quarter, then the stock price of the company would also go up and vice versa.
  • Large scale selling of shares by any financial institutions also decides its selling price. The financial institutions sell the stocks of any company in bulk which could lower the price of the shares.
  • The share prices also depend on the present economic and political conditions of the country.

The general tendency which an investor follows while buying or selling stocks is comparing the stock prices with the last 52 week low/high and calculate the share P/E ratio. However, to earn the maximum profits from the stocks, one must also consider the above factors and must be able to accurately forecast the stock prices.

A daily reading of the financial newspapers and seeking the advice of the experts would help the investors to minimize the losses by selling stocks. Sometimes, the investors may have to sell the stock at a price lower than the purchase price for a loss, however, he must be able to forecast the price in the future and should be able minimize the losses by buying the prices at the low price and selling them at higher price.

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