It’s not surprising that first-time investors often worry about the timing of their initial stock purchases. Getting started at the wrong point in the market’s ups and downs can leave you staring at big losses right off the bat.
Whilst there is no sure way to determining when to buy and sell stocks, several ideas and methodologies used by reputable investors all over the world can come in handy. Warren Buffet famously buys stocks when the share price is trading below its intrinsic values. An intrinsic value of a stock is basically the true value investors place on a stock. Whilst what makes up an intrinsic values is varying and often subjective, the bottom line is to buy stocks when it is trading below what you perceive to be its true value in the hope that soon other investors will realize and then presenting you with an upside when the price increases.
A stock trading below its book value may also be a strong candidate for a buy. However, this may be risky as stocks that trade below their book values could be for a number of negative reasons. But when a stock is trading below its book value and still records profit and revenue growth, it may just be a sign that the stock is undervalued and overlooked for reasons other than its fundamentals.
Market timing is also very important when investing and cannot be ignored. If you only buy when everyone else is buying then you are always buying high. Buy high, sell low? No, no, bad strategy!
2015 has been an unfortunate year for oil stocks as the price of crude has plummeted, but many U.S. oil production and service companies have actually posted huge sales gains. That means their shares could rebound big time when oil prices eventually rise to previous levels. The dwindling crude oil may have also affected some companies share price listed on Nigerian Stock Exchange (NSE).
This further emphasizes the opinion that this is the right time to invest in oil company stocks. Over the years downturns and corrections have always been good to the markets. When you see that the market is basically crashing, then you know it is the right time. There is long-term security in stock markets and hope that this will change the minds of millennials (or 18-to-34 year olds,) and would realize the long-term value. Millennials, whose financially formative years coincided with the Great Recession, have traditionally shielded away from playing in the stock market. Many are ridden with student debt and in many cases still living with their parents, those young adults have been afraid to risk their money in a system they don’t understand, let alone trust.
If you look at the history of stocks, it has never stayed low for several years. Eventually it will rebound, but in the near term investors who are looking to make quick cash are “on your own.”!!