Posts Tagged ‘financial system’

Points to Remember while Selling Stocks – Part 2

Hello Friends here we come up with an extension of our previous blog, “Points to Remember while Selling Stocks Part 1”.


Points to Remember while Selling Stocks

Points to Remember while Selling Stocks

In previous Blog we had touched upon few points related to selling stock tips.

In this blog lets get to know more of valuable points in this regard.:)

Major points when to sell your stocks ( starting from 4th..three already being discussed in Blog 1)

4. Stock is Over Valued:

During bull market, high quality stocks appreciate value.

But more importantly, with so much hype around the stock, they are often set up for a fall.

Therefore, investor may use the strategy of selling them first and buy at lower price.


5. Need Some Cash-

Certain unexpected circumstances may affect the time when to sell stock.

It is not wrong to sell stock to solve your financial emergency, especially the underperforming one.

However, it is advisable to have some emergency cash funds.

After all, basic investing rules is to start investing if you have enough money.


6. A Change in Monetary Policy-

The Central Bank, RBI changes monetary policy if it perceives that inflation is heating up.

By raising interest rates, it contracts the money supply and slows down the financial system.

It is generally seen that stocks normally react negatively against the action, and some time markets become more volatile.

If you are not happy with this type of risk then you should move a portion of your portfolio into stocks that will not be as affected with such changes.


7. A Company Suddenly Cuts Dividends or Lower Income Estimates-

This event should be investigated carefully before making any judgment to sell.

For good reason, the board of directors might want to retain more of their earnings for internal growth, rather than paying them out in dividends.

Sell a company’s stock if the performance is down.

Investors must never sell the stock of a fine company if its price goes either ways significantly – up or down.

Falling earnings margins and slowing earnings must be treated as a warning signal.

Lastly, I would like to say that always do your homework (Research) well while selling a company’s stock; you can use either the top-down approach or the bottom-up approach.

Markets are often full of rumors. You cannot make money in the market by acting on market rumors.

Always listen to the stories, but remember you should do your own research–and do it thoroughly.

Make your buy or sell decision based on your analysis of the company, not on what others tell you to do.


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Indian corporates use downturn to reduce costs

The global crisis changed the growth oriented goals of Indian businesses while there was a focus on operational effectiveness to ensure survival and companies undertook measures to achieve this as per a Price water house Coopers survey, Beyond the Downturn.
Indian corporates use downturn to reduce costs
However, India Inc. seems to have mitigated the impact of the meltdown on their businesses with over 91% respondents executing vital cost reduction and 70% reviewing operational/working capital cycle.

Moreover, India Inc. is bullish about its prospects and is beginning to assay growth again with the economy appearing to be on a path to recovery.

Meanwhile, it is said that survey respondents ranked cash flow management, difficulty in forecasting results and maintaining employee morale during the downturn as key constraining factors.

Further, majority of the survey respondents identified benefit from achieving increased operational effectiveness by following cost reduction, reduction in working capital and optimization of supply chain as a significant opportunity resulting from the downturn.

On the other hand, strong domestic economy, stable banking and financial system and timely government intervention were seen as key factors responsible for the less impact of the downturn on India.

Additionally, 99% of respondents viewed growing demand/volumes as their key recovery expectation with new hiring/ capacity addition getting the second priority.