Srikanth Chauhan, Equity Research Head of Kotak Securities55 minutes ago
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The correct entry in the stock market matters as the right exit. It is difficult for retail investors to decide when to get out of the stock. The result of this is that they do not earn good profits at times or suffer losses. Therefore, whenever you invest in a stock, make a strategy to leave. This will help you book profit at the right time, reduce losses or pay attention to any other better occasion.
Holding a share excessively not a good strategy Holding a share for a long time can prove to be a big mistake, especially when it has deviated from your goals. Or even after a long holding, it is a better strategy to get out. It is as dangerous to remain in it as to invest in any wrong stock. A well-planned exit strategy controls emotions. Avoid making wrong decisions.
It is a good decision to get out of the share …
1. On achieving the target set If you have set a target while purchasing a share. It is a good decision to book the profit. It is not right to stay in a share for a long time without any strategy.
2. Fundamentals or financial health disturbances Keep an eye on the financial health of the company. Many quarters have a decline in income or profit, debt is increasing, such a change in management which is not in the interest of the company, if the company comes under the circle of legal or regulatory action, consider getting out of such investment.
3. Sector’s poor performance Sometimes, external factor dominates a share performance. Reasons such as changes in policies, poor performance of a particular sector and economic recession may affect the stock. In this case, consider leaving.
4. Overwallication without reason If a stock trades up its historical average or much above the same companies without any proper reason, then correction can come in future. In such a situation, one should consider getting out of it or reducing holding.
Do not decide in fear or greed Do not remain in any stock because someone acquaintances or others have held it. Holding a share in the loss even in the hope that it will ever bounce back, not the right strategy. It is important to pay attention to fundamentals instead of any greed or fear.
conclusion: Knowing when to get out of a share can improve your long -term investment results. Regular review of your portfolio. Set real goals. Keep an eye on the company and market developments. By doing this you can decide to get out of a share in a rational manner.
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