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Have a clear exit strategy for each investment from "summary" of Investing Basics for Beginners by Razaq Adekunle
When making investments, it is crucial to always have a clear exit strategy in mind. This means knowing when and how you will sell your investment before you even make the purchase. Having a well-thought-out exit strategy can help you avoid making emotional decisions during turbulent times in the market. It also allows you to capitalize on profits when the time is right. One common exit strategy is setting a target price at which you will sell your investment. This target price should be based on your research and analysis of the market, as well as your financial goals. By setting a target price, you can ensure that you lock in profits when the investment reaches a certain level, rather than holding onto it for too long and risking a loss. Another exit strategy is setting a stop-loss order, which is a predetermined price at which you will sell your investment to limit your losses. This strategy can help protect your capital during periods of market volatility or unexpected events that may cause the value of your investment to decline rapidly. Furthermore, having a timeline for each investment can also be considered as an exit strategy. By setting a specific timeframe for how long you plan to hold onto an investment, you can avoid becoming too attached to it and potentially missing out on better opportunities in the market.- Having a clear exit strategy for each investment is essential for successful investing. It helps you make rational decisions based on your financial goals and market conditions, rather than allowing emotions to dictate your actions. By planning ahead and knowing when and how you will exit an investment, you can improve your chances of achieving your investment objectives.
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