When to Buy and Sell
However, professional money managers use a variety of investment techniques to take advantage of market fluctuations and decrease their risk. Consider the following investment strategies to further your success in the stock market:
Equity Trading Strategies
- Buy and hold: buy stocks and hold onto them until you actually need the money.
- Half at double: once the stock doubles in value, sell half your holdings; this way you lock in your profit yet maintain the same stake with which you started.
- Buy low, sell high: it’s tough to know if your stock will continue to grow or begin to slide, so many investors like to set a growth benchmark and, once the stock reaches that price level, they sell at a profit. If they buy the same stock again, because they believe it will continue its growth pattern, they simply set a new benchmark price for selling.
- Bargain basement shopping: buy when the market tanks, picking up proven winners that have been dragged down by the current market but that you believe will rise to the surface once the market has settled.