Is it advisable to buy stocks at a minimum?

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A temptation that many small and medium investors have is to buy stocks that are at a minimum. It sure has happened to you on more than one occasion. You will only think about how much that financial asset can revalue from those moments. But it's a very risky operation which in most cases should be avoided at all costs. For this we are going to clarify why you should avoid these situations and their real reasons.

The situation is even more serious when these falls are compounded by the scenario of historical lows. Or at least in recent years. What can you do in these cases? The most reasonable thing is analyze each specific case y llegar a una conclusión lo más objetiva viable. No es sorprendente que be su dinero el que esté apostando en acciones. Y nada mejor que proteger las operaciones será el target de los movimientos que desarrolles de ahora en más.

Buy at highs or lows?

Es uno de los eternos dilemas de los inversores. Si las operaciones deben formalizarse en una u otra tendencia. Los defensores de comprar acciones al mínimo argumentan que es la mejor strategy de inversión debido a que posibilita higher revaluations. This may be the case, but if they have reached these levels it is due to several reasons. At the same time, it is the market that sets the price of the shares and it has nothing to do with the level that they reached two or three years ago, as an example.

From this scenario, these operations are not at all favorable to your interests. Among other reasons, due to the fact that its price is submerged in a Deep draft downward spiral. To the point that they usually have a long way to go to keep going down in financial markets. At the same time, it is an unmistakable sign that something is wrong with the company. They can be your sales, the debt contracted or an obstacle in the shareholders, among other cases.

Another element of debate in these difficult situations is that sales clearly outweigh purchases. Due to the little interest what's in the company. The verdict of the investors is truly unforgiving. As you will understand, the risk you run when opening positions is very high. Above other situations. The most logical thing you can do is wait, not buy, as is your intention.

Free descent

Whatever the case, the worst scenario that you can find is that the actions are immersed under this figure. It is the worst option, according to the vast majority of equity analysts. They go so far as to say that there are no vacancies under any circumstances. Because the risk that their prices will continue to fall is still very high. These same experts indicate that it is necessary to wait until a radical change in trend.

In free fall scenarios, there is very little hope that the situation will reverse. It is a procedure of great Depression in the markets where you have all the ballots to lose. Because in reality, the potential for depreciation is still very high. In none of the scenarios proposed in the stock market has there been a change from free fall to an appreciation in the price of shares. Never.

Your actions must be aimed at radically forgetting about the values that this figure presents. And if for others who are present in the opposite movement. In other words, in free rise. Experience will help you reach these clear conclusions. Because there is a lot of money that you can leave in the financial markets from now on. Forget, therefore, these operations so dangerous for your investment interests.

More specific reactions

Decidedly, all you have is bullish escapes. But very punctual and limited in its duration. They will be intended for short-term operations. As an example in the operations called as intraday. They are those that are carried out in the same trading session and that have a speculative purpose, above other considerations. Whatever the case, you will not go any further in your investment strategies.

As a result of the strong oversold levels of these stocks, a bullish reaction is generated. But with a very short duration, which can last even a few hours. Even if no change in trend. Not even a change in your expectations. Unfortunately, they remain the same as before. Do not give it more laps because this is the reality of these movements in equities.

Another element that helps shape this signature move in equities is a truce by sellers. Used by the other part of the procedure to make your purchases. Nevertheless, they will be punctual and temporary with a very short validity period. It is the moment in which you should take advantage of it to achieve the maximum viable capital gain. Since very soon the downward movements in the selected value, index or stock market will begin to develop.

Experience advises not to buy

Under these low levels, situations have arisen that have been very detrimental to the interests of small and medium-sized investors. To be found, in theory, with very suggestive prices and that give rise to develop accumulation operations of their titles. For a few weeks or even months. depreciate almost half from your current listing levels. It was definitely not a good decision, quite the opposite.

These situations must be avoided from now on at all costs. There are many euros that you can leave on the way. Even with a real risk that the company will fail. This has happened in some moments of the Spanish Stock Market. With titles like Sniace, La Seda de Barcelona or Deoleo. Not surprisingly, market analysts warn, that if their prices have dropped so much it is because of something very serious that is happening in the listed company.

The best answer to avoid these dangerous scenarios focuses on being much more thoughtful in these depreciation processes. Do not think that securities for the simple fact that they are apparently cheap should be the object of your acquisition operations. Far from it, since the effects on your checking account can be truly devastating. until very worrying levels That can be very difficult for you to take over at that very moment.

The specific case of Banco Popular

So that you can check all this procedure, nothing better than going to a very recent case that almost everyone knows about. That is what is happening at the moment with Banco Popular. Their prices have plummeted in recent months as a result of his serious problems in the administration of this financial group. Even so, their prices continue to fall, relentlessly. Even when it generates very punctual rebounds. Some of them clearly spectacular.

If a few months ago you had been carried away by their low prices, right now you would be facing a very complicated situation. Losing more money than you can bear. This same approach can work for you today. And why can it no longer fall? Well, probably because your financial situation is practically irreversible. Even though radical changes in your direction could lead to your recovery.

Decidedly the best strategy you have is to walk away from their actions very quickly. You've got other more exciting alternatives para que puedas abrir posiciones a partir de los próximos días. Pero no en este banco de mediana capitalización. No en vano, resume un poco el tema que estamos tratando en este post. No es un caso único, pero hay otros que son muy similares en el mercado continuo nacional. Eso puede ocasionarle más problemas de los que se esperaba inicialmente.

What can you do with these values?

Your strategies with these listed companies are very limited. You have much more to lose than to gain. But you still have some small gaps in actions whereby you can start to deal with this situation. Here are some of them.

• You can take advantage of bounces to improve purchases. But always in operations very short term. And if it is viable in the same trading session.
• If your bearish procedure has no turning back you can bet on credit sales. It can be a very profitable operation for your interests. Not surprisingly, you will make money the more the shares fall in the financial markets.
• The most beneficial strategy for your interests is based on be on the sidelines of any operation and direct your attention to other securities, or even financial assets.
• If, however, you decide to open positions in any of these stocks, it will be better to do so under a loss protection order. Known as stop loss. They will help you reduce capital losses in all the operations you face in the financial markets.
• It never occurs to you that because stocks have low prices they are synonymous with cheap. It almost never has to do with each other.