Time To Take Some Profits?

Best Growth Stock – It is earning season and usually it is accompanied by big volatility in the stock market, which usually is used by day traders to take big profits. The question for you as an investor is, Should I ride the wave and take some profits from the volatility. Well, it will depends on several factors associated to your investment style and your level of risk tolerance.

Are you in the market as a long term investor or just to make fast money? It is very well known that being a long term investor does have a very good outcome. Usually you do not have to deal with this volatile market and your investments will only required minor tweaks during the year. You will find yourself modifying your portfolio in a smaller fashion thru out the year depending on the stock market movements. Your level of protection to higher risks gives you more security but by the other way that security is accompanied by less returns.

By the other way you will find the market trader who is actively managing his portfolio during the day and riding the smallest wave in the market. The potential for profits are enormous in the current economic environment. This will also be accompanied by higher risks of losing your capital in the long run. Only seasoned investors with ample experience in the market should attempt this level of risk.

What is the current market offering you as an investor that you can take advantage? it is the earning season that can provide you a great return. Markets usually react to news nut that reaction is quite exaggerated during the earning season. This is done to ride the market in both directions. For example, let’s say that you own Intel. Intel has projected earnings of X EPS. Before the earning call schedule the market is over reacting to it, getting all kind of news and information to weight whether Intel will beat the street. You are waiting for the call and that morning there was an article slaying that shipment of computers dropped for the past quarter. Guess what will happen to Intel stocks, it will take a nose dive to the ground. But still you are thinking Intel will beat the street on their earning call this afternoon, what is happening hear?

It is time to increase you share positions before the earning call since the stock will be selling at an unvalued price. You will be taking advantage of this prime price value since the earnings should at least be consensus with the street. After good earnings usually the market will compensate for the early losses and you will make some extra profits in the process. There are two main things that you need to take into consideration when performing day trading.

As mentioned before you need to be comfortable with the levels of risks you will be taking. As this might work very well there still the risk that the market will be over reacting. Second, you have to be very careful when selecting your stocks. You have to do the proper due diligence and study the company you will invest in. Give them a call to the investors relationship office. Answer the following questions: How their earnings have been in the past? How is their business model doing in the current economy? Is this a big cap stock or just a small cap stock that is traded very fast?

With the current earning seasons you have lots of opportunities to profit. We are just starting the year and it might be worth the risk been taken. This coming year seems to be a good one for the stock market and investors. Diversify and have fun in the current market.