50 Finance Monthly. Inve s tmen t What can you look for before a buy or sell decision on stocks? Your risk tolerance and investment objective are the primary factors that determinewhether you should buy, sell, or hold an investment. There are other factors that you need to consider holding stocks. A Demat account allows you to hold shares for as many years as you want. You just need to pay Demat account charges. Let us explore this subject further and understand how to decide whether to buy, sell or hold a stock. Growth of Revenue: You need to examine a Company’s revenue, not only on yearly basis but also quarterly. You can buy and hold the stock if quarterly sales show an upward trend. You can consider selling the stock if the Company’s earnings have been lower than expected in subsequent quarterly results. Dividends: A stock that distributes dividends to its shareholders consistently is considered a good buy. When you open your Demat account they may provide you with research reports. It can be a relevant source to find fundamentally strong stocks offering dividends consistently. You can buy such stocks and hold on to them for a regular dividend payout. Margins: A Company’s margins may increase, or decrease based on how well it is being managed. If the income is increasing, but expenses are also increasing faster, it means the Company is taking new initiatives to grow its revenue. It might be launching a new product or expanding its business operations. It can be a favourable sign to hold on to such stocks. Market Share: Market share means the percent of total sales in a sector generated by a company. There is nothing wrong with selling the stock if the Company loses market share to competitors. Valuation: There are different ways to determine a stock value. “You can buy and hold the stock if quarterly sales show an upward trend. You can consider selling the stock if the Company’s earnings have been lower than expected in subsequent quarterly results.”
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