To make millions from the stock market, you need to know when to sell your stock and shares. This is usually called share exit strategy. Exit strategy means a method of selling your stocks or shares on the stock exchange. Simply, exit strategy means when to sell your stocks and shares. In the business of stock trading, there are three basic issues:
a. When to buy
b. When to hold
c. When to sell
Out of these three basic issues, "when to sell" is the most difficult. Hence, the need for you to master when to sell if you really want to make millions from the stock market.
Over the years, research and experience have shown that there are five basic share exit strategies in the stock exchange:
1. Situational exit strategy
2. Period exit strategy
3. Price exit strategy
4. Closure of register exit strategy
5. Past performance exit strategy
1. SITUATIONAL EXIT STRATEGY
This strategy is used when an occurrence or situation pushes up the shares prices. A good example is when Otedola bought a controlling quantity of shares in AP stocks in 2007. The price of AP moved from N 60 to N260 under two months. You don not need a prophet to tell you to sell and take profit if you had bought cheap. A similar situation also occurred in international breweries plc.
2. PERIOD EXIT STRATEGY
This strategy is used when you have to buy and sell stocks within a period of time. It is usually applied to funds borrowed from banks and other financial institutions. Here, there is a time frame within which you have to invest the money in stocks and shares.You pay back at the expiration of the given period.Therefore you sell your stocks and shares within that period.
3. PRICE EXIT STRATEGY
This strategy is applied to a stock bought at a price and sold at a higher share price. Here, when you buy a stock in the stock market, you have a target price at which to sell. Hence, if the price share price appreciates to the price, you quickly sell off, take profit and move on to other stocks.
4. CLOSURE OF DATE EXIT STRATEGY
Companies that declare bonus or dividends always give a date for closure of register. The date for closure of register is the date at which anybody that have the company's shares on or before that day is entitled to the declared bonus or dividends. Anybody buying after that day is not entitled to the declared bonus or dividend. The strategy here is to sell at a day after the closure of register. With this, you gain the bonus, dividend and still gain the capital appreciation in the share price. I.e. you gain it all.
5. PAST PERFORMANCE EXIT STRATEGY
This strategy informs or suggests to an investor to sell a stock based on past price trend of the stock. Here, investors use the past behavior of the share price to decide when to sell the stock in the stock market.
GO SUCCEED.
Edoka Tony is a stock analyst with over 10 years of experience in the stock market. He dedicates his experience and knowledge to offering financial advice and helping people make mega millions in the stock market. He has written a lot of articles on stocks and investment which are a must read for every profit-minded investor.
a. When to buy
b. When to hold
c. When to sell
Out of these three basic issues, "when to sell" is the most difficult. Hence, the need for you to master when to sell if you really want to make millions from the stock market.
Over the years, research and experience have shown that there are five basic share exit strategies in the stock exchange:
1. Situational exit strategy
2. Period exit strategy
3. Price exit strategy
4. Closure of register exit strategy
5. Past performance exit strategy
1. SITUATIONAL EXIT STRATEGY
This strategy is used when an occurrence or situation pushes up the shares prices. A good example is when Otedola bought a controlling quantity of shares in AP stocks in 2007. The price of AP moved from N 60 to N260 under two months. You don not need a prophet to tell you to sell and take profit if you had bought cheap. A similar situation also occurred in international breweries plc.
2. PERIOD EXIT STRATEGY
This strategy is used when you have to buy and sell stocks within a period of time. It is usually applied to funds borrowed from banks and other financial institutions. Here, there is a time frame within which you have to invest the money in stocks and shares.You pay back at the expiration of the given period.Therefore you sell your stocks and shares within that period.
3. PRICE EXIT STRATEGY
This strategy is applied to a stock bought at a price and sold at a higher share price. Here, when you buy a stock in the stock market, you have a target price at which to sell. Hence, if the price share price appreciates to the price, you quickly sell off, take profit and move on to other stocks.
4. CLOSURE OF DATE EXIT STRATEGY
Companies that declare bonus or dividends always give a date for closure of register. The date for closure of register is the date at which anybody that have the company's shares on or before that day is entitled to the declared bonus or dividends. Anybody buying after that day is not entitled to the declared bonus or dividend. The strategy here is to sell at a day after the closure of register. With this, you gain the bonus, dividend and still gain the capital appreciation in the share price. I.e. you gain it all.
5. PAST PERFORMANCE EXIT STRATEGY
This strategy informs or suggests to an investor to sell a stock based on past price trend of the stock. Here, investors use the past behavior of the share price to decide when to sell the stock in the stock market.
GO SUCCEED.
Edoka Tony is a stock analyst with over 10 years of experience in the stock market. He dedicates his experience and knowledge to offering financial advice and helping people make mega millions in the stock market. He has written a lot of articles on stocks and investment which are a must read for every profit-minded investor.
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