As we well know in ForexSQ, in the world of financial markets, there are plenty of instrument to invest in. One of them is the stock market, where equities, stocks or shares are traded. A share is the ownership of a certain portion of a corporation. Once you own shares you are entitled to gain money from two sources: capital and dividends. Capital gains occur when the price of the stock rises. Dividends is a payment from the corporation to the shareholders. You can lose money if the price of a stock falls, while it is impossible to have “negative” dividends.
If you are an investor looking for “dividends” in the long run, then you should check which companies usually distributes profits to its shareholders. Not all companies have the same dividend policies. The questions of when to buy become less relevant if the investor only looks for a divided and to hold the stock for a long-term.
On the other side, the “when” becomes very important if the investor is looking for the stock’s price to rise and therefore achieve capital gains. Investors could look for capital gains in the short, medium and long-term; one could even become a daily trader, buying and selling stocks several times during a single day.
The question of when to buy becomes extremely important for a day trader and perhaps even more important when to close the position. The combo of options to invest also includes the possibility of “shorting” stocks. That is, to earn money when the price of a stock drops.
If the when to buy matters, the when to sell matters most because it is when one closes a position the moment when gains are materialized. You can own stocks that have risen 5%, but as long as you don’t sell them, you have not materialized any gains, you’re still on the market; yes, up 5% but still exposed to a change in the trend that could wipe all your gains out and transform that 5% gain into a 5% loss. Before deciding to buy a stock you need to have a trustable broker, one that offers you competitive prices and that suits your risk profile. After that, the best moment to buy a stock is when you have defined when, or under what circumstances, you will sell or close that position.
Risk Disclosure Analyzing your financial situation, you should decide whether you should start Forex trading or not. Rates of currencies can go down or rise higher any day, any hour, any minute so you should risk only that much which you can afford to loose.
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.
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