Many stock investors spend at least a little time online every week or even every day. They may routinely check to see what happened in the stock market today or how the week wrapped up. This helps them make decisions about whether they should add to their portfolio or sell some of their securities. If the general market has been strong but is starting to look weak, an investor may decide to take some profit and move that money to a more guaranteed source of savings, such as a certificate of deposit. Another possibility might be to sell some of the securities in the portfolio and use the money for a home improvement project, a down payment on a vehicle or another purchase.
Sometimes reading analyses of stock market price changes provides insight into strength or weakness in specific sectors. That can help when a person has a diversified portfolio. For example, the portfolio might include tried-and-true securities from companies that have been in business for a century or more. It also might include upstart technology companies that are riskier ventures. This investor may take note when investors start to sell off some of the riskier securities, indicating weakness in that sector. Sometimes a week’s stock market analysis shows weakness in the general retail sector, and perhaps in specific areas of retail. In contrast, while this activity is taking place, other sectors might show strength and indicate that the investor should hold onto those stocks in the portfolio.
Earnings reports are covered in these analyses. Many investors take great interest in learning about the economic health of the companies in which they own securities as well as those they have been considering. Earnings reports can’t always be taken simply at face value, which is why it’s often helpful to learn what economic experts have to say. Traders and investors may sell stock because of weak earnings, but the company may actually still be very strong in both the short and long term. That general sell-off can provide excellent opportunities for other individuals to buy in at a low price. Later, they’ll watch the price rebound and be glad they made that decision.