Trading is a game of timing. If a person gets the ability to buy and sell at the correct time, they are pretty much the undisputed king of stock trading. Knowing completely accurately what the market is going to do is nigh on impossible, but making a pretty good educated guess is something that everyone can learn.
Knowing when to sell a stock is not that hard compared to buying the best stock at the right time, and one has more weight to it. If a stock becomes zero and you don’t sell, you’re going to lose only the amount that you put in. But, if a stock starts going up and you buy before it gains speed, the profits are virtually infinite. That’s why this article is going to focus on the times when you should be buying the best US stocks.
The stock is on sale:
There are times in the history of every stock when it plummets down to prices far beyond what anyone predicted. Everyone panic-sells, and it goes even lower. This is a great time to pick up some cheap stocks that can rise up to their former glory in the future. Sure, avoid stocks for companies that are on their last leg. But make sure to dip your toes in stocks of companies that are temporarily down.
There is an unwritten mob mentality in investors that no one touches a stock with low prices. Even though the same person will gladly buy something on sale, this isn’t just speculation either. History has shown many times when stocks with no hope for recovery not only rose back to their former heights but far surpassed them.
The stock is undervalued:
The recent GameStop stock is a clear example of that. GME was extremely undervalued due to excessive shorting. Some retail investors noticed that and bought it before it started getting heat. The stock was at one, time hundred times the initial value.
The key to finding such stocks is market research and deep dive. Certain stocks are undervalued because no one knows about it. Just make sure to dig deep and find these hidden gems. The only thing to keep in mind is to understand the difference between an undervalued stock and a stock that is pretty much dead. One will bring you profits, and the other will waste your money.
After doing your research:
The value of quality, in-depth research in the stock market cannot be stated enough. The only thing that differentiates a successful trader from a failing one is the amount and quality of research that they do. If you expect to earn money from trading, you have to put in the necessary work. Look at the history of certain stocks, find patterns in their highs and lows, figure out the reasons behind dips and peaks. Once you have done your homework, you can go ahead and purchase the stocks that piqued your interest during that research.
The company is gaining traction:
It is easy to forget that a stock isn’t just an arbitrary ticker, and there is an actual business attached to it. So, take a look at the bigger picture. Don’t just focus on the stock trends. See how the underlying company is performing. A good time to buy stocks would be when a company is about to launch a highly anticipated product, a new startup is starting to gain traction, or a company got a patent granted for a product that can revolutionize its industry. These and many more similar scenarios can present a great time to invest in any company. Just make sure that you understand their business model completely.
A great example of buying a company’s stock at the right time would be with the video conference platform “Zoom.” When the pandemic started and everyone was forced to use a video call platform, a lot of people began using Zoom that was completely unknown at that time, and the company started becoming mainstream. That was a great time to buy their stocks, as it was clear that it is going to go mainstream very soon.
When you think it’s the right time:
Not every ideal stock purchasing time is going to announce its arrival ahead of time, and nothing is one hundred percent certain in the stock market. So, you might have to make some quick on-the-spot decisions. If you think that purchasing a certain stock is a good idea, go for it.