(12) Merger/Demerger Of One Or More Businesses
It is one of the most shocking & proven tips to know best and right time to sell stocks. Merger or demerger is a common phenomenon in stock markets. A company can buy a different entity to merge its operations with parent company.
However, a parent company can also demerge its subsidiaries into separate entities. This can significantly affect the stock valuation of a company.
If the merger goes in favor of investors then stock price may boost up. However, if it goes against investors then stock price may slide quickly.
Sometimes, investors of one entity may benefit more while investors of other entity may lose its value. In such situation, you need to smartly analyze the possible effect of such actions on your investment.
If you think merger or demerger may cause loss to your investment then its better to sell before the new entity comes into existence.
However, if you are lucky enough to own a stock that is acquired for significant premium then its better to sell to book your profits.
(13) Sell Stocks Because You Need Money
It is one of the most critical & proven tips to know best and right time to sell stocks. Cash is always considered as king. It is due to the fact that it is needed for day-to-day purchases as well as to meet emergency situations.
You can’t pay in terms of stocks or bonds to buy little or even big things. When you need money you have to sell your stocks especially when you don’t have enough extra money to meet your requirements.
Some of the basic things that demand huge money in cash include professional course fees, marriage ceremony, emergency treatment, travel trips, availability of better investment opportunity, & many more.
Once the need of ready cash arises, you have to sell stocks irrespective to its price levels. Therefore, investors are advised to invest money in stocks that you don’t need in short term.
You should only invest money that you can afford to lose in an untoward situation.
Image Source: Shutterstock