when to buy a stock
In this section, I hope to teach you 4 integral tips that can help you decide when you may want to buy a stock that you covet. Deciding when to buy a stock, is almost as important as deciding which stock you want to buy. For example, you may buy a stock which doesn't have the greatest prospects, but if you time the stock well, then you can get a lot of gains. This is why I hope to in this video enlighten you on when might be a good time to buy a stock.
1. When a stock is cheap
If you think about shopping at the mall, you are always looking for the best deal, so you can pay the least money for the most value. Similarly, it is the goal of every investor to buy a stock when it is cheap, and then sell it when it is high. A prime example of this was after the 2008 financial crisis. Stocks were insanely cheap at the time, and despite the fact that the markets were very pessimistic, many people would buy stocks cheap and see extreme gains over the long run. However, always remember to not just buy a stock just because it is cheap, that is why evaluating the stock is something you must do before looking at the stock price, and deciding if it is cheap.
2. when it hits your buy target
One thing many analysts do with a stock is establish a buy target, of when might be a good time to pull the trigger and buy a stock. You can either use the buy target of other analysts, or make one yourself, based on how you have evaluated the stock. When making a buy target, you don't need to have one set number in mind, rather it could be a range that you may want to buy in. In case you don't wish to set your own buy target, many financial websites have them published as well.
3. when it's undervalued
Now, you may think that cheap and undervalued are the same terms, but they do have key differences. When you are saying a company is undervalued, you are looking at the company's growth prospects, earnings, etc... If you think a company is undervalued, you are not necessarily saying it is cheap. An undervalued stock can be evaluated by looking at the company's fundamentals, profit retention, and capital management.
4. When you can onto it
When you have found a stock that you think is undervalued, you shouldn't just expect it to immediately skyrocket. This is something that will take time, and will steadily happen. So, you must be prepared to hold the stock for 3-5 years to earn the maximum profit. Even though it may seem as if this is a long commitment, you will find that it will really pay off in the end.