Profit Booking: Is it not for long term investors?
Every investor questions himself this question several times whenever the market has a down fall.
In the stock market, long term horizon for investment is always good. But along with the investment
careful watching on earnings is also important. Apart from that there is a lot of news flow on the
individual data. These data can be found through the official websites of the National Stock Exchange
and Bombay Stock Exchange, where every individual company has mandatorily inform any communication
regarding the latest development of the company.
By going through this news we can monitor and assess the situation of the company. Apart from NSE and
BSE, business channels like CNBC, NDTV Profit, Zee business and UTVi and the business dailies like
Economic Times, BusinessLine, Financial Express and Business Standard also update the information
on the companies.
Though you are a long term investor, you always should be cautious in the present day environment of
recession, where there is every possibility of sudden deep collapse of the markets. Your capital is nothing
but your hard-earned savings and at any time it should not be eroded. So be cautious always and monitor
your investments on stocks. Profit-booking from time to time is not a mistake. If you earn 50 per cent profit
on a particular stock, you can take out the stock of 50 percent, thereby your risk is limited to 50 percent and out
of that you have already made some money.
Booking profits also give you a chance of reinvesting in the market, whenever there is a big fall. So for the long
term investors also booking profits should be a regular process and through this disciplined manner of investment
and taking money out of it from time to time, makes your wealth much bigger! Good Luck!
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