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When to Buy Stocks
As the economic recovery falters the Dow Jones Industrial Average has dipped. When to buy stocks if often just at such a market correction . When to buy stocks differs from when to buy stock in an individual company. When to buy stocks in the broader market is when investors believe that conditions are set for a generalized market rally . When to buy stocks for traders is when both fundamental and technical analysis indicate new market trends either up or down. Successful long term investing requires that the investor find secure companies, each with a margin of safety such as cash or other unencumbered assets. The long term investor looks for intrinsic stock value in the form of forward looking earnings. When the broader market rallies there is a tendency for all stocks to rise. Thus a long term investor will add to his stock portfolio when fundamentals as well as technical analysis tools such as Candlestick charting indicate a coming rally. At this time the investor will look for underpriced dividend stocks as well. The situation for traders is somewhat more flexible.
Stock market trading profits come from changes in stock price . Because stock traders look for market volatility and a market correction in either direction they can profit from short selling as well as buying stocks . Traders may choose to trade the overall market by trading exchange traded stock index funds. This method of when to buy stocks simplifies the issue of following individual stocks with individual fundamentals and technical analysis . The trader simply follows Candlestick patterns of the stock index fund. The broader stock market will rise as the economy mends itself. It will also react to economic stimulus plans, although as nations heap debt upon debt the duration and effectiveness of government economic stimulus plans has many skeptics.
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When to buy stocks for traders is
when both fundamental and technical
analysis indicate new market trends
either up or down.
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Thus a long term investor will add to
his stock portfolio when fundamentals
as well as technical analysis tools
such as Candlestick charting indicate
a coming rally.
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This method of when to buy stocks
simplifies the issue of following
individual stocks with individual
fundamentals and technical analysis.
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It will also react to economic stimulus
plans, although as nations heap debt
upon debt the duration and
effectiveness of government economic
stimulus plans has many skeptics.
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It also shows us that there is a great
deal of market indecision in that the
stock has traded much higher and
much lower during the day as
evidenced by the lengths of the upper
and lower shadows.
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The value of using Candlestick
analysis in deciding when to buy
stocks is that Candlestick signals are
statistically based and take the
guesswork out of deciding when to
buy stocks, when to sell stocks, and
when to hold on to your money.