As the markets show signs of recovery doubtful investors still reeling from the impact of the pandemic are now in a fix. Should you be selling your stocks now? Is this the best time to sell you stocks? There is a lot of noise on the internet about when to buy stocks. But no one really tells you when you should sell a stock.
This blog will give you a detailed walkthrough of the current scenario so that you can decide whether it is the right time to sell or not. Of course, if you invested in Indian or US Stocks via Cube, our advisory partners would have helped you make this decision!
What Is The Current Scenario Of The Indian Markets?
The pandemic was very harsh on the global markets. Most big stock exchanges around the world saw a boom and unparalleled growth until the end of February. But after mid-March, markets around the world took a nosedive similar to the 2008 financial crisis.
But as the graph indicates, the Indian market is showing signs of recovery. Planning your portfolio diligently will matter now more than ever when it comes to the financial health of your investments.
Source: Google
The growth curve can be a potential indicator that selling stocks of big players and consistent wealth creators now may negatively affect your future wealth creation goals.
Should The Fear of Missing Out Worry You?
It may be a tempting prospect to sell your underperforming stocks at the first signs of recovery. The fear of missing out on small profits or simply recovering the principal amount can be a worrisome thought. But ask yourself, did you choose the right investment in the first place?
If you bought stocks that were cyclical, the investment was bound to be risky and volatile in the long run anyway
If you bought stocks that were non-cyclical, the investment has the potential to recover and deliver consistently over the long term
A little known fact about economic slowdowns is that you can still make valuable buys that can help you generate potentially high returns for the future. The worry of losing out on these stocks need not be a worry anymore. The solution? Read why you should invest using Cube towards the end of this article.
Rebalancing and repositioning are good strategies only if you base them on advice either through thorough research or from seasoned professionals like Purnartha who have been leaders in the equity research industry since 2009.
What Is Good For The Long Term?
It is no secret that the stock market, as a whole, has grown over the past 3 decades and has delivered increasingly solid returns in the process. So patience is not just a virtue but it is essential to creating wealth in the stock market. In line with this logic, you should think about where these stocks stand in your path to achieving your 5+ year investment goals.
If your investment goals have already been achieved by the given stock, the problem still isn’t solved. Because the losses incurred during the pandemic may be overshadowed by the profits that these stocks generate over the next 10+ years.
Jumping out of investments due to the fear of losing money can deter you from generating long term wealth. Consulting a wealth coach can help you build a balanced portfolio to get you where you are to where you want to be financially in 5+ years.
Why You Should Invest In Indian Equities Using Cube
Our Indian equities partner, Purnartha, recommends stocks based on your investment goals and the risk you choose. At Cube, we care about the financial well-being of all our users. That is why we go beyond just suggesting when you should buy the best Indian equities - we tell you when to sell them as well.
A pandemic is a rare event unforeseen by the generations that currently invest in stocks. While this can be a cause for major concern, a crisis can be a potential investment opportunity to buy stocks that were either undeterred or recovered handsomely. Investing in industries, sectors and companies that are antifragile can do wonders for your future investment goals. So consult a wealth coach to understand which Indian stocks you should buy and sell today.
1. What if my stocks are performing well, should I still consider selling?
Ans. Even if stocks are performing well, it's essential to evaluate whether they align with your financial goals and risk tolerance. You may decide to continue holding them or take profits, depending on your strategy.
2. What should I do with the proceeds from selling stocks?
Ans. Once you've sold stocks, you can reinvest the proceeds in other assets, pay down debt, or use the funds to meet financial goals such as buying a home, funding education, or saving for retirement.
3. How can I minimize emotional decision-making when selling stocks?
Ans. Emotional decisions can lead to impulsive selling. To minimize this, create a well-defined investment plan, set clear objectives, and consider working with a financial advisor to maintain a disciplined approach.
4. Is there a rule of thumb for when to sell stocks?
Ans. There's no one-size-fits-all rule for when to sell stocks, as it varies based on individual circumstances. It's best to rely on a well-thought-out investment strategy and plan.
Conclusion
Deciding when to sell your stocks is a significant decision that should be based on your unique financial situation, investment objectives, and risk tolerance. Market conditions, personal financial goals, and the performance of your holdings should all be considered when making this decision. It's important to avoid impulsive actions driven by emotional reactions to market fluctuations. Consulting with a financial advisor and having a well-defined investment plan can provide valuable guidance in making the right choices regarding your stock portfolio. Ultimately, the "right" time to sell stocks is a highly individualized decision that should align with your overall financial strategy.
on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!
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