With stocks and commodities, you’re buying, selling, and trading quickly and therefore there are times that it is better to buy and sell. Individuals that make a substantial amount of money from investing in stocks are well-informed and keep track of business trends and economic forecasts. You don’t have to be an expert to invest in stocks, but If you’re not prepared to make moves quickly, consider a long-term investment in a project or company. However, there no actual best time to invest in stocks. If you keep waiting you risk missing out on some potentially profitable moments.
Here’s what you need to know about timing your investments.
Which Quarter is Best to Invest in Stock?
When it comes to investing in the U.S., there are some seasonal changes. You can expect the January Effect in the beginning of the year. This means that prices are often pushed up by investors as they return from the holidays. You may want to avoid buying immediately in January, and instead wait a few weeks for prices to stabilize.
Investopedia says, “September is traditionally a down month. The average return in October is positive historically, despite the record drops of 19.7% and 21.5% in 1929 and 1987.” September tends to join the summer months in slower growths, while October is considered the start of the busy winter/holiday season that is generally more profitable. However, this also depends on what kind of market you’re investing in, the year, and what else is going on. This may not ring true every single year, it’s just a trend in the market.
When Should You Buy a Stock?
The stock market goes through natural changes all year, with prices corresponding to important events, seasons, and sometimes even days of the week and times of the day. However, these changes are subtle and small. In the morning, stocks fluctuate and prices can be higher than they are in the afternoon – but only slightly. If you keep waiting for the right moment, you may miss out. Investing is better than not investing at all, according to the experts at Business Insider.
Are IPOs Worth It?
Scouring the internet for clues, opinions among professionals are split when it comes to IPOs. Some investors claim they are too risky, while others tout that investing at the right time can make a lot of money overnight. Always perform your due diligence and do your research on a company and its value and popularity before investing. Trading IPOs is slightly more complicated than regular stocks and if you want to invest in one, you’ll likely have to work with a brokerage company that will be ready to invest for you when the brand goes public, so it’s not a spur-of-the-moment transaction. You should be well informed and prepared before you go in on an IPO.
When is an IPO worth it? You can’t always guess which company will do well when it goes public, but there are some signs of a worthwhile IPO investment you should look for. Firstly, invest in an industry that you understand. This is the key to understanding the trends, which brands are popular, and which companies are innovating in a way that will bring them and you profits. If you don’t get it, this isn’t the industry to invest in for you.
Take a look at the management, board of directors, and execs listed on their website. Make sure the company hasn’t had any bad press or lawsuits. Check that those in charge have experience and a good record, otherwise you risk losing money.
One of the most important factors to consider is why the company is going public. Companies usually go public for one of two reasons – they are either in debt, but popular, and hoping to raise cash to offset their debts and continue, or they are allowing investors in to raise cash to expand, innovate, create a new product, etc. It’s best to invest in a company that has a good track record and is planning to expand. However, there are plenty of companies that have saved themselves and gone on to become profitable after going public to pay off debt.
There’s always some risk involved, there’s no real best time to invest, and how much of a risk you’re willing to take is up to you!
