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When is the best time to buy a stock?


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Gary Mishuris, S. B. Economics & Computer Science, Massachusetts


Institute of Technology (2001)
Answered Jun 17
Originally Answered: When is the best time to purchase a stock?

Thanks for the A2A. Please dont follow the advice of people who claim to know
what time of the day/week stocks are attractive. They dont. If it were that easy,
they would be on a yacht somewhere spending their billions rather than giving you
that advice on Quora.

There are two times to buy a stock:


More Related Questions
1. Never. If you cant properly assess its value (which is not an easy process),
you would be better o not investing directly in stocks and do it through
In other languages
something like a low-cost index fund.

2. When the stock price is substantially below your intrinsic value En espaol: Cundo es el mejor momento para
comprar una accin?
estimate for the business. So if you think the business is worth $100, you
might wait for $60 or $70 to make sure you have a sucient margin of
safety. Question Stats

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Last Asked Jun 17

4 Merged Questions
Kritesh A
Answered Jun 20 Edits

There are few technical indicators that can be used to nd the timing of entry or exit
in shares. Here are the top few indicators that I use:

1. Exponential moving average

2. Relative Strength Index (RSI)

3. MACD

4. Envelopes

5. Bollinger Bands
Source: Moving Average Crossovers

Source: MACD Histogram

Further, the combinations of the indicators mentioned above gives the best result.

In addition, it is advisable to use these indicators on fundamentally strong company.


There are few fundamental ratios like P/E, P/BV etc that you can also consider before
buying a stock.

I hope the answer is useful to the readers. If you want to learn more about how to
select a stock to invest, you can visit this blog post: How To Select A Stock To Invest In
Indian Stock Market For Consistent Returns?
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Samir Majhi, Been investing since I started working


Answered Sep 10, 2015
Originally Answered: When is the best time to buy stock?
When you have the money.

If you think the stock market is a place to get rich quick then you're treating it like a
casino. Then your returns will be very similar to that of a casino. You'll keep gambling
until you loose it all.

The idea that a bell rings to signal when investors should get into or out of the
market is simply not credible. After nearly 50 years in this business, I do not know
of anybody who has done it successfully and consistently. I don't even know
anybody who knows anybody who has done it successfully and consistently.
John C. Bogle , Common Sense on Mutual Funds: New Imperatives for
the Intelligent Investor

No one has been able to consistently time the market. You have to keep investing for a
long period of time (at least 10 years) to reduce the impact of short term voalitility and
let compounding work.

You'll also have to spend a lot of time studying the business of the stock you're
investing in. If you don't have this time or expertise, then invest in mutual funds (if
you're investing in India) or Indices (if you're investing in America).

Warren Buet started o the Graham way by buying decent businesses when they
sold at high discounts(40%) to their intrinsic value. Then he switched to the Fisher
way of buying great businesses at reasonable prices.

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Dhruv Goda
Answered Jan 28, 2016

There are some turnaround stories which are facilitated solely by a change in the
management or a new product rollout. These events cause the stock price to swell
multifold, infact more than 5000% in some cases. For example, if you would have
invested Rs. 100 in Eicher Motors Ltd. back in April 2008, it would have become
Rs.9865 in July 2015 i.e. a 9765% increase in over seven years. Fascinating enough
right?

There is another fascinating phenomenon, called the Great Paradox. Life is full of
paradoxes and it's not surprising that the same goes for our very own stock market
too. As they call it, the Great Paradox means that the stocks which seem too high
in price and risky for most investors usually go higher and those that seem low
and cheap, usually go lower. This may be hard for you to digest, but dont worry,
well be on the same page 3-4 mins from now.

In a study, we have found that most of the retail investors, if truth be told more than
95% of them take delightful comfort in buying stocks that are substantially o their
highs and have made their way into the new lows list, thinking that they are now
great bargains. What they fail to realize is that they are trading at such degraded
values for a reason. They chase these laggards in hope of a turnaround which does not
happen in most of the cases; and even if it does, it takes a hell lot of time. They have to
learn and accept the fact that those decisions have FAILED and its time to park that
money into better prospects. If you are one of them, well you too belong to the
Bottom Buyer category.

You can check for yourself by performing this small experiment. Below given are
three stocks (names to be disclosed at the end of the experiment) accompanied by their
charts. The question to be asked here is, which one looks like the best BUY to you
considering a 5-6 month horizon?

As you can clearly see, Stock A has been making new highs consistently over the
period from January 2013 till the end of June 2013. So you have to ask yourself,
whether it is wise to purchase such a stock considering the fact that it has been
rallying continuously for the past 6 months. The biggest concern that you must have
is whether the stock has any more fuel left to take its price higher
Moving on to the daily chart of Stock B, you can see the consolidation that it is going
through which is supported by some consistent volumes. This consolidation has been
going on from June 2014 till June 2015. So what do you think? What happens next? Do
you see an uptrend?

Coming to our nal chart i.e. Stock C, you can see the correction that the scrip went
through during the 5 month period from March 2015 to July 2015 where it witnessed a
33% decline from its 52 week high of Rs. 1077 to Rs. 720. This is a good enough
correction for any stock in such a short duration. So the nal question you should be
asking yourself is whether the stock has corrected enough to restart its upward
journey.

Now that youve analyzed the stock charts and know what the Great Paradox is,
which stock would you bet your hard earned money on? As per our research, most of
the investors went for the third option i.e. Stock C. the reason being, as mentioned
earlier, the stock seemed to be trading at a bargain price. But, let us see what
happened next.

Stock C: Plunged more than 50% in less than 5 months.

Stock B: Down close to 27% in less than 6 months.

Stock A: Rallied more than 285% in over 5 months.

Shocking right? In a separate study, we found that, out of the two groups of stocks
which made new highs and lows during a bull market, those on the new-highs list
continued their rally and those in the new-lows went even lower. Remember, a stock
which making it into the new-highs list during a bull run on solid volumes and that
too for the rst time can be that next multibagger youve been looking out for. And
just to make it clear,
Stock C: Kaveri Seed Company Ltd.

Stock B: Larsen & Toubro Ltd.

Stock A: Ajanta Pharma Ltd.

Moving on, if you were reluctant to buy Stock A, ask yourself: how does a stock go
from Rs. 270 to Rs.1050? The answer is very simple. It must rst hit 271. Then 272.
Then 273 and so on. In other words, it has to reach the levels it has never seen before
and this is what will make it a winner. So rejecting such a stock might not be a great
idea after all, especially if it is breaking out of solid bases on big volumes during a bull
market. As an astute investor, your job is to identify stocks and buy them when they
look expensive for the majority of the conventional investors and sell them after they
move substantially higher and begin to appear attractive to the same set of investors.
A great example to prove this point is the NASDAQ listed Cisco Systems Inc. Cisco
sold at its highest price in November 1990 at $0.17 (which was scary during the time)
and went on to make a monumental 76300% rise from that point in the next 10 years.
It then traded close to $130. I hope you get my point now.

Lastly, I'll try and explain what a base formation is. In the simplest words possible,
base formation can be dened as a period in which a stock or other traded security is
taking a break from its previous trend (be it a rally or a downtrend). It serves as a
breather for the stock. A sound basing can last from 7-8 weeks up to 15 months or
sometimes even more which is followed by a breakout. Tremendous price advances
can be possible if a stock is starting to break out of its price base during the start of a
bull market. Consider the example of our above mentioned winner, Ajanta Pharma
Ltd. As you can see there are three base formations before every price rise of time
durations like 6 months, 3months and 2 months. The approximate percentage stock
price rise after each of these bases is 77%, 66% and 57% respectively which is HUGE.

Remember, just because a stock is making new highs doesnt mean that it can be
bought. Theres always a right time and then, there are other times. If you study and
prepare yourself, you too will be able to pick out those future MULTIBAGGERS as and
when they appear. Happy Investing!

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Arpit Bhawsar, 5
Answered Nov 15, 2016
Originally Answered: When is the right time to buy a stock?
Trading for an income or active trading is a farming career, principally because of the
nancial freedom and instant gratication. But a choice to become an expert trader
has to be prepared very cautiously after analyzing your skills, commitment, discipline
and love with trading. Otherwise, this can be harmful to your specialized and private
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trader you need to know the basic reason behind every trade, make report it and learn
from every trade.

4. How much money is required for a particular trade and risk management are the
probably the most signicant matters and special skill needed to become an expert
trader. It is extremely necessary to initially allocate the accurate trading and leaving
doubtful trade. And the capital put up for each trade must not be more than 10 to 15 %
of the total capital processed.

5. It is also necessary for a non professional to apply a stop loss strategy on each trade
you get - fundamentally a determined point to set a secure position with the help of
expert tips like as Free Stock Trading Tips , Option Tips, if you're not accurate. By
processing this we terminate the incorrect trades quickly and have the mind cool to
look out for other benecial trades. One of the big mistakes created by traders is
adding more volume to decrease the charge of achievement when they are incorrect.
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Dev Kumar Airon, Investing real estate, stocks, mutual funds, gold for 35Y
Updated Jun 30 Upvoted by Debnarayan Bhattacharya, MSc Finance, EDHEC Business
School (2018)
As soon as you nd a good story and are convinced that it is so.

I found a wonderful story - Hero Honda at Rs. 16. Sold it at Rs. 24 a few months later.
Made a prot of 50%. Made the worst mistake of stock market. I should have been
buying more at Rs. 24. IT WAS A TOP STORY. I should have bought it (at) a much
higher price 30, 40, 50, 100, 200 . It is worth Rs. 19000, yes Nineteen Thousand
today.

Never miss a good story. Dont ask when should you buy it.

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David Colver, Chairman, Operis, Leading Advisers in Project Finance


Answered Oct 16, 2015
Originally Answered: What is the right time to buy a stock?
Later edit: Unfortunately this answer no longer makes sense following a question
merge by Quora content review.

"Putting your money to wait" is a smart choice. At today's interest and ination rates,
the opportunity cost of leaving it on deposit is close to zero. And at today's
valuations, about which I agree with you, the risks of losing part of your capital is
high.

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Ky Trang Ho, Covered stocks, ETFs, mutual funds, economy for 10+ yrs
Answered Sep 10, 2015
Buying individual stocks is hit or miss. Yes, you can get insanely rich. But you can
also anal raped, especially if you're inexperienced. It's been scientically proven that
the pain of losing money runs deeper than the joy of making it.

I recommend dollar cost averaging into mutual funds or exchange-traded funds. That
means buying a set amount every month or quarter and your buying price averages
out over time. For a list of mutual funds and ETFs recommended by nancial
advisors, see:
How To Invest Your Money In The Second Half Of 2015

Berkshire's Charlie Munger: The Legendary Investor's Strategy And Best ETF,
Mutual Fund Picks

The Most Beloved Mutual Funds Of Successful Investment Advisers

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Siuta Tang, I developed my own automated system to trade for living.


Answered Oct 16, 2015
Originally Answered: What is the right time to buy a stock?

You'd better try trading on a paper account before you use real money. You are a
beginner and you are unlikely to make money in a long run.

You need a complete strategy and framework to trade/invest. Finding a right time to
buy a stock is just one of the many question. How about what's the right time to sell a
stock? How much % of capital I should use to buy this stock? Should I buy more when
my prot grow? There are so many things that you need to know before you can earn
money consistently.
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Anchal Ganjoo, works at S&P Global Market Intelligence


Answered Nov 14, 2016
Originally Answered: When is the right time to buy a stock?

Right time to buy a stock is when the company is going through a Bearish phase,
because prices would be lower at that time and they would rise in the future, giving
you prot.

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Dion Shaw, Individual nvestor in stocks, ETFs, and ETNs


Answered Jun 19

Time of day, week, month or year? The ones that claim to know the best time of day to
buy a stock are either mistaken or market traders, not investors.

If you want to trade, Youll likely have trading orders in pre-market open. When the
market opens, the trade is executed. Then you wait until your price is met, you make a
prot and sell. Thanks to computer trading, you can have these orders in-place ahead
of time.

If you are an investor, you are in the market, long-term. You will have researched the
company and will know when the price is right to buy. Time is not a factor. Bigger
companies tend not to move much in any trading day, baring bad news or great news.
Over years, the price should increase, if youve done your homework.

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Rahimul Taher, Founder of Taher Financial Planning & Life-Long Learner
Answered Jun 19

I dont know if there is a best time to buy a stock but there denitely lots of wrong
times to buy a stock.

Here are some of the wrong times to buy a stock:

You heard on the news about a big company buying another company. Wrong
time to buy.

You heard anything on the news about a company rising quickly and are now
interested. Wrong time to buy.

You are looking to get rich quick and need the money fast. Wrong time to
buy.

You should be buying a stock because you expect a long-term return on the business
that youre buying. Trying to time the market is a good way to go wrong.

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Carter Clark, CEO at KeepStreak


Answered Jun 17
Originally Answered: When is the best time to purchase a stock?

When is the best time to purchase a stock?

The best time to BUY a stock is a Monday morning, prices are always lower then any
day of the week, and the morning has the same eect

the best time to sell is the afternoon on Fridays, to just when the market closes,
Fridays mean higher stock value because people like to rush before they drop on
Monday.
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Ramamurthy Guruvayurappan, Four thousand followers.Most viewed


writer 90 plus subjects
Updated Jul 2
This is what I have learnt in my 35 year stock investing experience.

Companies come out with quarterly results. Whenever a company comes out with
very good quarterly results, simply buy it. You may be paying a higher price. Don't
bother. Any company which comes out with excellent quarterly results, for next 6 to 8
quarters, nothing will change much. The company will continue to come out with
very good quarterly results. Share prices will continue to rise.

Similarly, whenever a company comes out with not very good results, dump it. Don't
see the price. Don't wait for the price to increase etc to exit. Nothing will change for
sure for next 6 to 8 succeeding quarters. Share prices will continue to fall.

See for yourself how Indian pharma / IT companies came out with successive
excellent results and how they are facing poor results now.

I can give you hundreds of examples.

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Thomas Sundstrom, BS Finance & Accounting, Drexel University (1965)


Answered Jun 17
Originally Answered: When is the best time to purchase a stock?
The best time to purchase stock is when you are happy with your nancial situation
and decision of risk tolerance. That said, for the stocks you mention, there has been a
2-4% retreat this past week that appears to provide a buying opportunity. Some
writers suggest the price decay may continue. The decision is yours. Look at the
mainstay business news sources and make up your own mind. HTH. YMMV.

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Siva Kumar, works at Self-Employment


Answered Jun 21

I agree with Kritesh but I suggest you consider Money Flow Index also.

BUT, there is a catch with following technicals, a very big catch.

Price action depends upon many factors. Technical Analysis depends entirely upon
price pattern, TA assumes, EACH and EVERY factor that inuences price action is in
included in price pattern and one need not look beyond it.

But, it is dierent ballgame in reality.

TA works most of the time only when the stock is undergoing its normal correction.
This normal correction is unique to every single stock. Also, this method works for
only very strong counters. For instance, a stock like MRF or EICHER MOTORS may
obey this 50/200 SMA rule but not all counters. Many tend to drop further once the
crossover happens. Also for no counter you can predict if it falls further after
crossover and when the fall stops (i.e. where it takes support). True, there are known
Support and Resistance levels but these are predictive only. It things were so simple,
no one would lose money on Stock Market.

Just to give an example, BAJAJ FINSERVE fell after bad Q results but it is recovering
now. There are other stocks that spring back almost at once whereas most stocks tend
to slog or fall very deeply. TATA ELXSI is a good counter but it is slogging for almost
two years because the domain itself is out of favor. Thus, it is extremely important to
follow investor sentiment also. All this goes to prove that buying stocks calls for good
knowledge and it can not be or should not be done on carelessly.

What other factors bear on price action? The quality of the counter itself, its liquidity,
equity, state of its domain and local/international factors to name just a few.

Finally, the best time to buy depends upon your strategy. If your horizon is long term,
you can buy a stock in its normal correction cycles. If you have the facility to monitor
regularly, you can add or buy in very deep corrections like crashes. Once again, you
should buy strong stocks and hold for long term to see any good prot.

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1
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Jashan Khurana, 5 years studying nance
Answered Nov 15, 2016
Originally Answered: When is the right time to buy a stock?

You would nd many other answers about this question. Many theories which are
complex would drain up your mind.

As per my own experience the best time to buy stocks are when the market is down
and so you will get shares at lower price and best power you have is the YOUR
INSTINCT.

Regards

Jashan Khurana

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Vinod Kv, works at Admod Technologies


Answered Nov 5, 2016
Originally Answered: When is the right time to buy a stock?
The right time to buy a stock is when that company is going through its worst time
and after studying the fundamentals if you are convinced that a turnaround can
happen. Buy when no one is interested and have patience and sell when you see all
are running to buy the same company.
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Radhika Gupta, studies at Narsee Monjee College of Commerce And


Economics (2018)
Answered Nov 6, 2016
Originally Answered: When is the right time to buy a stock?

According to me the best time to buy a stock is when it's price is low and you expect
the price to rise in the future. That way you could buy at a lesser price and sell the
stock after its price had reached the peak making more prot.
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Rass Bariaw, Made and lost a few


Answered Sep 10, 2015
Originally Answered: When is the best time to buy stock?

It depends on your style and philosophy. You can buy stocks as their price falls or
rises or while it remains at. It depends on whether you are a value investor or a
technical investor. Only you can decide which of these strategies work for you.
Dierent strategies work for dierent people because people have dierent
temperaments.

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