Everybody knows the saying “Buy low, sell high”, its the basic goal of every single investment. All it means is that you should sell something for more then you purchased it for and thus generate a profit. It is very simple to understand but a bit harder to put into practice. Hard enough that many people struggle to accomplish it, even on the lowest level.

From my observations it appears as though people try and avoid this outcome all together. When they see a stock or investment opportunity that is undervalued or “low”, their immediate thought it is “what if this goes even lower?”. So what do people do if they don’t buy low?

They buy high, they believe that since the commodity has been increasing in value that it will continue increase. Instead of following the belief “buy low, sell high” they are hoping to “buy high, sell higher”. I’m always amazed at how many people can purchase something at a peak and how few can purchase at a trough.

Instead of waiting for the media to tell you when/what to buy, do your research, find some undervalued opportunities. Who cares if your neighbor says you crazy, if you have done your due diligence you will be the one laughing at them.

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Filed under: Investments