Stock Markets Exposed

stock investing?

I bought some stock and it went up. How do I know if I should hold it or sell it? If I do sell what do I do with the profits if I want to reinvest them? I am a new investor so I dont know what to do. Do I reinvest in something else or just hold the stock and hope it goes up some more?

Public Comments

1. Prior to any stock purchase, there should be a plan, a strategy. What was your purchase criteria? Are you investing for the long term or are you trying to be a trader? If you plan on doing a lot of buy/sell transactions, be sure that your gains will well exceed your transaction fees. Assuming you are planing on doing stock trading, the basics involve holding the stock until the sell criteria is met. This may be a fixed %gain such as 10% - 20% and may depend on the market conditions. I like to hold until the stock and market conditions indicate it is time to sell. When you decide to sell, you can keep the profits in your account. Of course, you will need to account for the buy/sell transactions on your tax return. You can hold the sales amount in your account until you find the next stock you want to buy. Remember that being in cash is a position. Sometimes it is better to be in cash than in the market. Read up on technical analysis of the stock trading. Best of luck to you. Having luck is executing with a prepared mind.
2. Depending on what school of thought you have. Warren Buffett as an example has not sold a stock. He purchased movers and shakers in early points in the companies existence and holds for value. As an example, If you would purchased Microsoft in 1987-1989 time line, at 100 shares at $28 a share based on splits alone the value would be substantial in the 20 year time frame. Splits:21-Sep-87 [2:1], - 200 shares 16-Apr-90 [2:1], 400 shares 27-Jun-91 [3:2], 666 shares 15-Jun-92 [3:2], 1110 shares 23-May-94 [2:1], 2220 shares 09-Dec-96 [2:1], 4440 shares 23-Feb-98 [2:1], 8880 shares 29-Mar-99 [2:1], 17760 shares 18-Feb-03 [2:1] 35520 shares Times current share price of $29.16 equals = $1,035,763.20 Value for an original investment of $2800. Seems to me, buying an holding isn't a bad idea. huh.. I did the daytrading plays back in the dot-bomb era, several of the companies I played tanked, some have came out, I wish I would have held on to the stock of a couple back in the 90s, Dell, EBAY, AMZN, YHOO to name a few i day played. If you are going to ride a tiger find the leader and stay for the long haul.
3. Never, ever, buy a stock without an exit strategy in place. You should always have a "stop loss" and a "target" amount. Always obey this rule. Buying stock is not gambling. It's serious business. Read some books on investing &/or trading. It will save you thousands of dollars, over your lifetime. Never buy anything you don't understand. Never take stock "tips". Always use position sizing rules when getting into a position. Always have an "asset allocation" plan. Never make any decision based on a "stock split" (they mean nothing). Stay away from systems promising unbelievable returns (in fact, just stay away from "systems".... unless you made it). Good luck!
4. I agree with that last answer before me. You should set a "target price", or as he called it an "exit." This is the price you are willing to sell at a low and high end. How low will you let it go before you sell? How high before you sell? Remember though, you only qualify for the long term capital gains tax if you hold it for more than a year. For now, I would suggest a reinvestment plan. Hold the stock for a while and see where it goes. Reinvest the dividends.
5. There is not enough information to answer your question. Do you want to make more money? Do you want to lose more money?