Posted on: March 7, 2009 10:08 am

Buy Low Sell High? Or Sell Low Buy High?

If you are an investor, you've heard it a hundred time...buy low, sell high. The basics of investing.  But people are emotional beings. The market has lost about 54% of its value and people are running for the hills. Cowards.  They tell their friends that they are just being smart, but deep down they wonder if they made a mistake by cashing out to avoid more losses.  First, you only really loose when you sell.  Second, remember that you own shares. Those shares are only growing. Third, this is the lowest you will likely see the market in your lifetime, so BUY.  It harder to do than it is to understand.  In the game of investing there are principles we must remember in order to win long term:  Buy Quality, Diversify, Balance your holdings, and Think Long Term.  If you let your emotions get ahold of your decisions you will end up selling low and buying high.  Just watch how the market has responded in all of the other recessions of the past.  If history is a teacher, and it is, we can expect to see a very strong bull market starting before long. The stock market generally leads us out of a recession. It begins its surge about 6 months before the economy is out of its recession.  If you are trying to time the market, you will probably not be too successful.  Studies have shown that those who buy quality and leave it alone will be the winners over long periods of time. Tha t is because we are poor at decising when to jump in and jump out. So...hold on to your quality investents, buckle up, throw away those @#$% statements for a few more months and be smart (not emotional).

Category: SPiN
Tags: Investing, market
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