Dear Nancy,
With all the recent volatility in the markets, I'm never sure when to put in my orders to buy or sell. Is there a better time of the day to call my broker to execute the order?
Signed, Keith
Dear Keith,
Just like trying to time any investment purchase or sale, it never seems to be right. I find that when there has been a lot of market news and releases after market close, first thing in the morning there can be more short-term volatility. What happens in terms of market direction in the first 30 to 60 minutes or so certainly does not set the tone for the day. Nor, as we recently experienced does the latter part of the day just before markets closing. If you think that just because there has been positive news that the markets will go up and close that way you may be in for a surprise.
So, my short answer is, there is not a "magic" time or formula as to when to submit any order.
When buying, set your price or a tight price range that you are happy to pay for a stock or to sell it and stick to it. You are paying what you think is a fair or under-valued price for a company's stock. Even if it closes below what you paid, focus on the true or future value.
When selling, determine the value you are trying to maintain. It can be either the amount of gain you are happy with or restricting the amount of capital you have left.
You may not always be happy with the price your order filled, at but it makes better sense to drive looking forward rather than backwards.
Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment advisor with RBC Dominion Securities Inc. To ask her a question, send an e-mail to asknancy@rbc.com
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