Archive for August, 2008

Buy Low, Be-Concerned When High

I find it interesting when a person, who rarely makes stock trades, reacts to a short-term stock or market trend.  The short-term could be a day, a week, a quarter, or whatever.  That’s not my point.  People, specifically during this downturn*, seem concerned about low stock prices.

To me, low stock prices seem to be the easiest decision I know of: buy, buy, buy!

*Perhaps, this downturn and my relative life experiences have something to say.  People who have lived through the Great Depression probably have a greater emotional reason to save the last pieces of their soap bars, like my grandfather did. . . as opposed to keep buying pieces of paper, I mean keep buying a part of a public company.

But when the prices are high, I think more reflection is required.  For example:

  • How long am I looking to hold, without cashing out?
  • When do I think particular stocks will peak?
  • What time do the Simpsons come on?
  • Is there a better investment at this (most likely upturn of the economic) time?

As with all things though, it probably depends on your relative situation.  Being a 20-something that is young, dumb, and full-of-cum, it is probably easier for me to say “risk it man,” as opposed to a parental figure with a mortgage, insecure job, and/or a coke fix.

. . . and, maybe when you are in the situation of low-risk, barrowing (at these times) may seem just as obvious.  Low interests rates, let’s do it and barrow!  . . . because I have a secure job, secure lifestyle, and secure securities.

You say potato; I say potato.

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