[Summary]
The advantage of knowing the market price is that it does not guarantee profits, but it makes it easier to organize the materials you need to look at.
The advantage of knowing the market price is that it does not guarantee profits, but it makes it easier to organize the materials you need to look at.
In actual investment, the first step is to maintain the cash ratio when the market is unfavorable or when there is little material for making decisions. However, we cannot overlook the fact that it is easy to feel that it is an opportunity loss if you do not constantly buy and sell.
In this article, we will explain the benefits of knowing market prices not as "knowledge" but as steps to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First, divide the rest based on the benefits of knowing the market price.
When looking at the benefits of knowing market prices, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. The benefits of rest and knowing market prices are not the only factors that make a decision. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Take a break, but don't overestimate the benefits of knowing the market price.
If you want to look at the benefits of knowing the market while resting as an advantage, first of all, make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
Checking the following points will make things a lot easier.
| Axis to check | Even if you take a break, you can view it with the benefit of knowing the market price. |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
The advantage of knowing the market price is not only when you don't have enough knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Decide first what you can see with the benefit of knowing the market even if you take a break
- Differentiate between conditions that bring about benefits and conditions that do not.
- When expectations are too high, test with a small amount
- Write down the terms of withdrawal before considering profits.
The important thing here is not to settle on one correct answer based solely on the benefits of knowing market prices. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using the benefits of knowing market prices as a basis for making an actual decision, check at least these five things.
- Can you explain in one sentence the purpose of looking at the benefits of knowing the market price?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of confirming the benefits of knowing the market price is not to speed up your actions, but to reduce unnecessary mistakes in judgment.
Summary
The advantage of knowing the market price is that it is useful for organizing your investment decisions. Even if you read it as an advantage, treating it as a stand-alone buy/sell signal will make your judgment difficult.
The points to keep in mind are as follows.
- Know the market price while resting See the benefits Decide on your purpose first
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. The advantage of knowing the market price is that it should not be used as a word to rush into making a decision, but should be treated as a tool to pause before buying or selling.