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When to Buy And Sell
“Don’t chase every cycle. Let the markets do
their job. You should create an asset allocation that you
feel comfortable with and then let time and compound interest
work their magic.”
- Allyson Lewis, author of
The Million Dollar Car and $250,000 Pizza
No investor wants to buy at the top of the market. Just
as bad are knee-jerk sales of good stocks just because they’re
experiencing a temporary downturn. It’s always a good
idea to buy quality and hold on for the long-term.
However, professional money managers use a variety of investment
techniques to take advantage of market fluctuations and decrease
their risk. Consider the following investment strategies to
further your success in the stock market:
Equity Trading Strategies
- Buy and hold: buy stocks and hold onto them until
you actually need the money.
- Half at double: once the stock doubles in value,
sell half your holdings; this way you lock in your profit
yet maintain the same stake with which you started.
- Buy low, sell high: it’s tough to know if
your stock will continue to grow or begin to slide, so many
investors like to set a growth benchmark and, once the stock
reaches that price level, they sell at a profit. If they
buy the same stock again, because they believe it will continue
its growth pattern, they simply set a new benchmark price
for selling.
- Bargain basement shopping: buy when the market
tanks, picking up proven winners that have been dragged
down by the current market but that you believe will rise
to the surface once the market has settled.
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