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Lord Jesus Christ Says...

I have received abundant grace and the gift of righteousness and reign in life through Jesus Christ (Romans 5:17).

23 Aug 2018

STOCK MARKET--BUY HIGH, SELL HIGHER.


Research shows that the best-performing stocks make new highs before they make their major leaps in price.
How many times have you heard the phrase, "Buy low, sell high"? This is the conventional wisdom in the investment world; however, research shows that the best-performing stocks make new highs before they make their major leaps in price. Moreover, stocks at new highs tend to continue moving higher, while stocks making new lows tend to continue to move even lower.
Stocks that seem too ‘expensive’ and risky to most investors are likely to continue rising. And those that seem ‘cheap’ usually go down.
This is a concept many investors find difficult to accept. They assume it's too late to buy a stock that's reached an all-time high. But the great paradox of the stock market is "Stocks that seem too ‘expensive’ and risky to most investors are likely to continue rising. And those that seem ‘cheap’ usually go down."

Avoid Cheap Stocks

Perhaps you're one of those investors who think they'll hit the jackpot buying a low-priced stock that goes on to make huge gains. Some investors equate cheap stocks with better value or low risk. If a stock is cheaply priced, then you can't lose a whole lot, right? Wrong. The truth is that trying to consistently make money with cheap stocks is difficult, at best. Stocks are cheap for a reason. Think of a stock's price as a measure of its quality and, consequently, its potential. Stocks selling cheap have a much smaller chance of making major advances, because they're usually companies lacking good performance records. Also, professional investors shun low-priced stocks because they tend to be lightly traded, making it harder to move in and out of such stocks.
So, you can see what research bears out: it's best to look for new highs in quality stocks. It's especially good when the stock is coming out of a base. But don't wait too long: As soon as you spot a buy point -- and if all other factors are in place, such as good earnings growth -- it's time to have confidence and conviction and make your move. Otherwise, you may miss your opportunity.
Wish you good luck.


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