(14) Watch Out For Hype
It is one of the most wonderful & proven tips to know best and right time to sell stocks. Some stocks are always known to remain on the radar of media attention.
These stocks are actively discussed in live stock discussion as well as message boards. Stock analysts also prefer to provide free & paid tips on such stocks.
These types of stock-feeding frenzies attract a lot of new & inexperienced investors. These unskilled investors never hesitate to bid up prices to levels that are sure to collapse when hype dies.
You are advised to take profits before the hype dies. You should remember that in a market where everyone is optimistic, it is wise to remain fearful. However, when everyone is fearful you need to be greedy.
This is one of the most favorable strategies of Warren Buffet to make money from stock markets.
[Read Also: 16 Key Indicators To Make Money Quickly In Stock Markets ]
(15) After Bankruptcy
It is one of the most popular & proven tips to know best and right time to sell stocks. Bankruptcy is a legal status of an entity that can’t repay its debts to creditors. It is usually imposed by a court, often initiated by debtor.
If a company files for a bankruptcy, it becomes almost worthless to shareholders. It is usual thing to see higher volatility in the shares of a bankrupt company.
This volatility is due to the fact that big investors & operators trying to cut their positions. They often try every step to lure small investors to cut their own stake at higher price.
It is usually done before the stock exchange shut down trading activities in the script. You should stay away from such entities even for day trading purpose. You should never expect a magical event overnight.
You should cut your positions as soon as possible. It will help to realize losses that can be used to offset future capital gains for income tax purposes.
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