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BIS Cosgrove Accountants Gold Coast & Brisbane

Smart Investing: Why Selling Stock Might Not Be Your Best Option

There are many reasons an investor might choose to sell stock. Current events can play a big role in how the stock market performs. Before you make a quick decision and possibly lose out on financial opportunities, make sure you understand market influences and why staying and not selling might be the better choice.

The Stock Market vs. the U.S. Presidential Election

As things happen in the world, the stock market reacts. One of the biggest influences to hit the market every four years is the U.S. presidential election. This year was a little different because it didn’t just hit the market, it slammed it.

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Donald Trump’s shock win of the US election slammed stock markets worldwide.  Image Source: Flickr

Confidence in candidates can dramatically shift stock market prices. The Dow futures plummeted 800 points just hours after the polls closed this year. A Trump victory brought concern to global investors, who do not like surprises. As more people decided to offload investments as a way of minimizing perceived risk, what is your best option?

  • The Darkest Days Often End with the Biggest Payouts

You may be surprised to learn that the most profitable days happened during times of chaos in the market. These often followed some of the worst sessions in market history. If you want to be successful, you have to take some risks. If you rush to avoid every big drop that’s on the horizon, then you are at best going to wind up with a mediocre payout.

  • More Trading Does Not Equal More Profit

A study was released by the Journal of France that revealed more trading does not equal more profit. In fact, those who traded more tended to perform the worst. Households with a portfolio that included 20% monthly turnover were under performing by an average of almost 6% annually. That adds up to a lot of money over time.

  • Never Sell Out of Fear

There’s nothing wrong with selling a stock that you feel is overvalued. That’s what you should do to make more money. The problem is when you start selling stock out of fear of a value decrease. You should be invested when stocks are at their cheapest.

Look to the Future Before You Sell

If the stock market were predictable, then everyone would be a millionaire. The reality is that it’s far from predictable and sometimes scary things happen. Rather than take a reactive position, be proactive and look to the future. Consider what’s happening now and what will come after.
Don’t sell out of fear just because everyone else is. You can stand to make a lot of money by being smart and taking advantage of low times when they come.

Make sure you have a professional on your side to help you make good decisions before you sell or buy. BIS Cosgrove is ready to help you ride out the stock market and make the most out of every dark day.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]