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Buy Low or Buy High?

Everybody in the world has heard the classic adage “Buy Low, Sell High.” It makes perfect sense, right? Who wouldn’t want to buy a stock at $5 and watch it go to $100? In practice it’s not so easy as anybody who has invested can tell you. Here is another strategy that you may have not considered: “Buy High, Sell Higher.”

Humans have a built-in aversion to buying things that are “expensive” or that cost more than they remember something costing before. This is understandable in other areas such as shopping, but it may actually hurt you in the stock market. Basically good stocks go up and bad stocks go down. It sounds simple, but it can be hard to fully register. People always want a bargain but that is a double-edged sword in the stock market.

Looking in the Wrong Place

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