When to book profits in volatile markets?
Profit Booking has always been a tricky business for normal retail investors.
We tend to hook on to our stocks sometimes that we miss out opportunities to sell and make profits.
These are some strategies for investors to book profits and avoid missing out on
opportunities
Set target and phase exit Booking profits at regular stages is one of the most basic strategies.
Wealth managers suggest maintaining a ‘book profits’ and ‘cut loss’ target on investments and keeping track of them.
However, many investors do not follow it or lose track of the targets.
It is therefore advisable to keep booking profits regularly, whenever the price moves significantly.
Smaller milestones can be set in steps of 10 to 20 per cent price movements.
Regular selling and booking profits enable investors to average out the opportunities and use them in a systematic manner.
The stock markets have gone up significantly over the last few quarters.
The markets have been volatile during this run-up phase and had a couple of profit booking correction phases.
Profit booking (or exit) is a very sensitive factor and the decision to book profits is personal to an investor.
Many investors are sentimental about their investments and therefore miss an opportunity to book profits (or cut loss) at the appropriate time.
These are some strategies for investors to book profits and avoid missing out on
(ii) Market trends
(iii) Sharp run-up
(iv) Being objective
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