| Every investor knows the phrase "buy low, sell high". | | | | missing out. Even though the stock is more |
| What that means is that it is desirable to buy a stock | | | | expensive now than it was a month ago, some |
| when it is selling for a low price and then to sell it | | | | investors can't wait to buy at that higher price! |
| after the stock goes up. Buying low and selling high is | | | | Conversely, a stock that is going down is on sale |
| how you make money in the stock market. Why is it | | | | from the price it was a month ago. It is like the |
| then that there is such a temptation to do just the | | | | jacket that you were more inclined to buy and yet |
| opposite: buy high and sell low? | | | | most investors find it more difficult to buy that stock |
| Why is it so much easier to buy high and sell low? | | | | at the "on sale" price. They fear that because the |
| Stocks are so different from other everyday things. | | | | stock is lower and continuing to go down, the value |
| When you go shopping for clothes or electronics and | | | | of the company must be lower. Sometimes that is |
| you see something that is on sale, you are more apt | | | | correct and sometimes it is not. With the herd |
| to buy it. A sale is a good thing for most | | | | mentality though, many investors get swept up in |
| merchandise. If a jacket was $120.00 yesterday and | | | | doing what everyone else is doing; buying when the |
| $100.00 today, it is still the same jacket but now you | | | | stock is high and selling when it is low. |
| are more likely to buy it because of the price drop. | | | | In my experience, every time the stock market has |
| People who buy stocks seem to have a different | | | | dropped a significant amount, as it has this year in |
| mentality. When the stock market is on the rise and | | | | 2008 so far, if I would have bought my stock picks |
| stocks keep getting more expensive. investors have | | | | at the reduced prices, I would have made money. |
| the tendency to want to jump in so as to not miss | | | | Unfortunately I am like most other people and have |
| the boat. When a stock was $60 a month ago and | | | | found that buying stocks in a down market is a very |
| now today is at $70, many investors are actually | | | | difficult thing to do. |
| more inclined to buy at the higher price for fear of | | | | |