Profit Booking In Stock Market Means

Take the profit out and look for other sectors like capital goods which are yet to catch up infrastructure or even banks and insurance.

Profit booking in stock market means. It must be understood that for a situation to be called profit booking there has to be a profit involved. What is profit booking. If this conviction is urging you to book profits on all or most of your equity holdings to sit on cash think twice before acting.

One of the key and prime reason to book profits at regular interval is that stock markets are more volatile compared to the past. Imagine the impact of a small economy like greece on worldwide markets. Many people who buy the shares do not understand the importance of selling the shares or exiting from the market at the right time.

Profit booking also needs to be done if the person is a year or two years away from the goal. A gush of liquidity has been supporting our market so far. Why it is imp to book profits in stock market.

This is the time to get out of auto aviation. If the stocks in the portfolio are getting overvalued which may also mean that the market has risen considerably then profits can be booked early. Booking profit means selling a stock that has increased in value so that you actually get book the gain.

As you all may know that the stock market is extremely volatile and the share prices keep on fluctuating all the time. For one market tops are as difficult to predict as market bottoms. Profit booking along with extremely high stock valuations subdued the indian equity market on friday.

Profit booking essentially means to realize the profits from the shares that have been previously purchased during trading. This decision depends on the value of the investment. Accordingly market opened with marginal gains on back of favourable cues from global.