You might have heard of the idiom “Strike while the iron is hot”, this phrase can be a very easily related to buying and selling of stocks.
As in the current market situation, speaking of Oct 2018 to Dec 2018, people were selling off their investments panicked by the global and local volatility. It’s a great opportunity for both value and growth investors. You have to be ready with the bunch of potential winners and their buy prices, so that when the stock falls to this price start buying them. There can be momentary rebound and the stock price may raise higher than your buy price. Or, the prices may fall further, in which case you can accumulate more.
26th March 2018, showed similar rebound, where it can be easily understood that value and growth pickers bought truck loads of stocks, especially banking stocks.
Don’t worry if you missed this opportunity to buy, there will be some more opportunities to buy, be vigilant.
Strike while the iron is hot is also applicable while selling the stocks. But, it’s bit more tougher to identify the peak price of a stock. Moreover, there is no way to know if the stock has peaked! But, it’s not impossible either. Just remember these points :
- If you sell a stock when it reached your peak/sell price, and you felt it is valued insanely high. But, immediately after you sold the stock, it’s price rose by few percent. Don’t curse yourself, as that’s the way most successful investors sell, including Warren Buffet.
- What goes up has to come down, hence wait for the next correction and buy it at its next buy price range.
Let’s recall few important lessons for a successful investment:
1. Be greedy while others are fearful
2. Buy when everyone seems to be selling
3. Don’t follow the crowd
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This short article is to help us stay focused and disciplined in our investment journey.