If you knew exactly how much stocks would go up or down next week, next month or next year, what would you do differently?
Malkiel’s answer: The math does suggest slower growth for equities, maybe even single-digit gains going forward. But there’s only one sure way to prosper as an investor, and that’s by rebalancing with discipline. Sell high, buy low Malkiel’s point, one backed up by decades of research, is that guessing what’s ahead is not an investment strategy — it’s a waste of time.
Which stocks to sell? Malkiel is quick to tell Heath that picking among stocks is not a good idea. Even professionals get it horribly wrong. “Nobody, and I mean nobody, can consistently predict the short-term moves in the stock markets,’ Malkiel said. By owning the whole market at a low cost, investors are relieved of the risky and thankless task of trying to pick winners and losers in the stock market — short run, long run and in-between.
In Malkiel’s words, it’s the diversity of your investments that matters most, not the short-term moves up or down.
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Buy low, sell lower
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Buy good stocks, and when they go up, sell ‘em. And if they don’t go up, don’t buy ‘em.
Wow ya know I never thought of it like that, this guy is some intellectual. I'll give it a shot!
Haha
Only problem is that tops and bottoms (buy low, sell high) are only so in hindsight i.e. crisp bottoms and tops only exist in the past. Only thing extant in the present IMHO is the current trend.
The stock market has been pumped up to the sky on funny money. The crash when it comes will be devastating. Timing is impossible so get out now.
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Source: Forbes - 🏆 394. / 53 Read more »