Buy low and Sell high It’s a simple strategy
We hear every where that you ought to buy low and sell high. It’s that simple. However, we tend to forget that emotions take over rational and people tend to do the opposite. They buy high when the stock is doing well and they sell low when the stock market is doing bad.
Buy low and Sell high It’s a simple strategy
When the stock market is doing well, the price is going up. You hear all the buzz around money. You hear how a lot of people are making money. Other people hear this because of fear of missing out they start buying. They start buying because they are not thinking rationally, they are leading their emotions dictate what they do.
When they stock is doing well you ought to be selling any profit that is above your portfolio allocation percentage and looking for any asset that is on discount.
When the stock market id doing bad, the price is going down. You hear all the buzz around money. You hear how people are losing money, You see you stock lose value, fear take over and people do an unwise thing. They sell their shares at a lose, not making any profit.
Example:
You ought to buy base on asset allocation not base on price.
If you have 5% of your total portfolio invested on JEPI and the stock price goes up, your JEPI is at 6% now. What you ought to do is sale that 1% of JEPI and with that money buy another asset that is on discount, that is undervalue.
So technically, you ought to be looking for undervalue assets, whether the stock market in general is doing well or bad. You always looking for undervalue assets.
When you buy a undervalue asset, it means that you are buying at discount. therefore, you are buying when the price is low. That’s the right way to buy assets.
The right way to sell assets is when you are in profits, above your percentage allocation
Dividend Investing
I enjoy dividend investing combine with buy low and sell high. Dividend investing give you cash flow that you can use to buy anything you want or you can use it to reinvest.
Still when the percentage allocation goes higher than what’s its’ intended, it’s time to sell the profit and invest in something else.
