HOW TO MONITOR YOUR STOCKS

by ThankGod Eze

There are two ways that an investor can monitor his or her stocks. He or she can either monitor the stocks on a given day or through a stockbroker. The understanding of this topic is very important is because; a lot of investors are confused in this area. For example, it is possible for you to give your broker an order to sell some stocks in your portfolio, which you are monitoring for some time and you feel that it is time for you to sell, and you issue a sell order, you may notice that when the receipt will be issued to you by the broker, the price might have changed, even to the downside. Also, you may equally give an order for purchase knowing that this is the price that this particular equity is sold, at the end; you will be given a receipt with a higher price. What is the cause?

In some regulated markets like Nigeria, the price of equities can move maximum of 5% up or down everyday. So for every given day that your order is not carried out, there is no guarantee that the price will remain static. Timing is very important in determining the price that you want to buy or sell a particular share or equity. Many novice investors give orders to buy or sell when the market have closed, believing that the last price that the stock was traded on before the closure of the market for the day is still valid, but it is not always so. If you give either a buy or sell order when the market is closed, your broker must wait till the next day for market to open before he can carry out your orders, and the market may open with either a plus or minus depending on what happened when the market is closed.

Another factor to watch when monitoring your stocks is to know the type of stocks you have in your portfolio. Some stocks are highly liquid that you can find buyers anytime any day, but some are not. And if you have the later in your portfolio, your broker can only sell when he sees a buyer, and remember that price changes with time. Transaction can only be said to be complete when there is a buyer and if there is none, your stocks will be there and the price may go down before he gets a buyer. Also in carrying out buy orders, there are times when these liquid stocks are scarce, and this is the time that price usually rallies up, which means that your broker can only buy at a premium.

However, the broker you are dealing with has a major role to play in the success of your transactions at the floor of the exchange. Some of them are very slack in carrying out orders, and if your broker is one of the slack ones, you will still have problems buying or selling at your choice price. So what am I saying here? Look well before choosing a broker, your hard earned money is involved.

Invest wise.

About the Author

ThankGod Eze is the owner of http://investmentpicks08.blogspot.com. A site that aims at giving out free investment strategies that guarantees maximum returns of invested fund.