When to Invest in the Stock Market? All You Need To Know About It

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When to Invest in the Stock Market? All You Need To Know About It
Table Of Contents
Best Time to Buy and Sell Stocks: An Overview
Which Factors Affect the Buying of Stocks?
What Is the Best Time To Sell Your Stocks?
Wrapping Up

Best Time to Buy and Sell Stocks: An Overview

Starting with the most common question that a newcomer in investment asks, which is the best time of the day for buying stocks? The thing is, stock prices fluctuate throughout the day and even so each second. 

A seasoned trader knows what a good time of the day to buy a stock is, and they also know about the best time to sell them. The stock market usually sees a dramatic move when the market is open at 9:30 Am. There are two common reasons, the first being the big overnight news on the prior day. In that case, trade is settled when the market opens the next day again. It could drive massive gains and losses depending on the news. 

Second is the morning headlines; these are similar to that of overnight news and have a similar effect on the market. It is considered that the opening time of the stock market is the best time of the day to both buy and sell stock. It is also known as the time for "Dumb money" investors. 

People tend to believe that the knowledge they have attained before the stock market's opening can help them in the first few minutes of the market opening. Afterward, they can typically go to much more stabilized holdings by midday. 

Which Factors Affect the Buying of Stocks?

Several factors could affect the buying and selling of your shares, most of which are listed below. 

Supply & Demand For Stock

This is the most basic factor, and it is not an outside thing that is affecting the market. Supply and demand are simple metrics. If stocks are in abundance, their stock price will be lower. At the same time, if the stocks are few and the people who want to buy them are more, then their price will automatically increase. 

Besides this, if a company is doing well and everyone wants to buy their share but the number of shares that they have are in less quantity. That will also lead to an increase in the share price. 

Company Related Factors

If a company has public shares, then anything which happens to the company will affect the people who have those shares. If the company is making great progress and making a profit in order to gain an influx of investor capital, then the stock prices are bound to increase. This is because everyone wants to buy the stocks of the company which is doing in the market. On the other hand, if the company is not doing great, then shareholders are likely to dump their shares, which leads to a fall in the stock price. 

Investors Sentiment 

If an investor is taking a much greater risk and making investments aggressively without taking much time to analyze, then in a short time, they will see stock prices go up. But, if they are more subdued and make decisions safely, then their stock prices will come down. This is because of two factors. The first is the Bullish market, where the investor is quite confident when they are doing risk trading. When people are investing more aggressively, the demand will surely see an uptick. 

A bearish market is one where people tend to hold onto their stocks and are more worried about the risk associated with them. As a result, these investors will have much more safety in their minds than confidence. This leads to stagnation in the market resulting in the stock prices slowly going down. 

Internet Rates

What happens in the Reserve Bank of India can have a massive impact on stock prices. RBI is the one that decides the interest rates in India, and it keeps on updating it frequently to keep the Indian economy stabilized. 

With higher interest rates, companies have to pay more amount when clearing their loans, and this results in shallow profit margins causing stock prices to reduce. Inversely, low-interest rates will eventually lead companies to borrow more money at lesser interest rates. As a result, companies will be saving more money and making much better profit margins. This scenario will lead to an increase in stock prices. 

Current Events & Natural Calamities 

Apart from changes that take place in the finance of the country, current events such as the election, some major festivals, and natural calamities could easily affect the share market. Even a terrorist attack or a civil war can bring a massive change in the share market of the country in a bad way. All of these events have the tendency to pull the prices of stocks down and deeply impact the market's volatility. 

What Is the Best Time To Sell Your Stocks?

The best time anyone can sell their stock in the Indian stock market is at the start of the day, which is between 9:30 Am to 10:00 Am. This is because, in the morning, people are more likely to buy stocks and invest in them. Apart from this, the best time to sell your stocks is Friday as the coming two days market is closed, and it will open on Monday with a new week. 

This is the basis of selling any of your stocks at any time, no matter what the condition of the market is; apart from this, when the stock market is in good condition, you can make a profit by selling the stock. The stock value is more than the current value at which you are holding the stock. 

On the other hand, when the company is not performing well of which, you have purchased the stocks. In that case, you should sell its stocks as soon as possible and buy stock from a more reliable company that has a better potential of giving you profitable returns. 

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Wrapping Up

So these are some of the important points that you need to keep in mind when investing in stocks. Truth be told, if you are new to investing and you are learning about it, then the best thing to do is don't invest too much all at once. You should learn and then put a small amount into the stock market to see the results of your knowledge. 

If the results are profitable, you should invest just a little bit more. If not, then you need to learn more. Furthermore, never invest all your money in one stock and in one industry. This will increase your chances of loss; make sure to invest in multiple industries and companies to have a more vibrant stock portfolio. 

  • What is the best time to buy stock in a calendar year?

    Over the years, it has been evaluated that the share market gets in a stronger position as the year on the calendar changes; this is also known as the January effect, which is seen due to the year-end sale for tax purposes. It is also said that many investors re-return on January 1st to start investing in the share market resulting in a rise in the share price. 


     

  • Is it the right time to invest in the share market when a market closes?

    Investing in trade after the market is closed is known as after-hour trading, and it allows investors to buy and sell their securities outside of normal trading hours for a number of purposes but mainly because of the new data release that investors get after the market has got closed for the day. 


     

  • Is it a good time to invest in the share market when the market is down?

    The best line, of course, when the market is down is to be calm and don't think about selling your shares just now. But that said, your investment decisions have to be based on your needs. Just because the market is down doesn't really mean you can buy tons of shares in a small amount. If you still want to invest more, then it is best to invest in Treasury bonds, Money market funds, Dividend stocks, and in Precious metal funds. 


     

  • Is it a good time to invest in stocks on Diwali?

    On Diwali, the Indian stock market is usually closed, but it is open for an hour in the evening. It has been noted that investing in that one hour of Diwali hardly disappoints investors. The data also shows BSE Sensex closed higher in 11 of the last 15 such special hours of trade. 


     

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