One of the secrets that you need to understand and master when trading on the stock market is when to buy stocks. Mastering the right timing to buy can help you maximize your potential returns. Here are 5 tips on when it is time to invest your money on stocks.
When a stock goes on sale
When looking for stocks to buy, always find a better deal. For instance, Black Friday and Christmas offers the perfect opportunity to buy stocks. At this time of the year, there is a huge demand for products like apparel, electronics, or shoes. However, for some reason, there is no excitement among investors when stocks are on sale. In stock market trading, there is also a tendency for investors to avoid stocks when they are low.
When it reaches your buy price
When investing in stocks, you need to estimate its value. This way, you will know if it is on sale and likely to increase to your estimated value. You need to establish a range at which you would buy stocks. Without this value, it would be difficult to determine the proper time to purchase a stock.
When it is undervalued
In determining if a stock is undervalued, there is a lot information that is required for establishing a price range. When trading on the stock market, one of the best ways to measure whether a stock is undervalued or overvalued is estimating a company’s future prospect.
Other factors include discounted cash flow analysis, which discounts future projected cash flow to its present value. When added up, the sum represents the theoretical price target. If the current price is lower than the target price, then it is a good time to buy.
When you can patiently hold it
When you have the confidence that a stock you are watching will still increase to its true value, you have the option to wait a little more until it reaches its true value before buying the stock. In stock market trading, whether its next month or next quarter, it might be worth considering to hold it if you believe that the stock will still grow.
When you have done your own research
Many investors do their own research on a particular stock before making a decision to buy. From reading an annual report to reading the latest news, you can easily determine whether it is the perfect time to invest on a stock. Such information can be found on the company’s website.
Knowing when to buy stocks can make a huge difference between losing or winning with your investment.
Robert Peter Janitzek offers tips and guides on how to be successful in the stock market. Check out his blog at www.robertjanitzektrading.com.