[A073] Money Mission Impossible: Buy Low and Sell High

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The Dow recently closed above 20,000. It seems like we’re still seeing a bull run, even with some losses. Indeed, even with recent drops, the Dow is still above 20,000. But will it last?

It’s tempting to try to time the market. But the problem is that, as humans, it’s hard for us to make good choices when it comes to investing.

We talk about the need to buy low and sell high, but is this actually practical advice? Let’s look at how likely this is for you to accomplish.

Concepts

What it means to buy low and sell high.
The realities behind trying to get in low and sell high.
Does stock picking make sense?
Downsides to frequent trading.
A look at indexing and how it works.
Riding the market instead of trying to beat it.
Why most people end up selling low — they have to.
Should you invest cash instead of having it just lying around?
The psychological downsides of trying to buy low and sell high.
The concepts of rebalancing and asset allocation
How to create “buckets” of money based on your time horizons.

This week’s DO NOWS are all about taking action for a better investing future. Consider opening an investment account and setting up an automatic plan to invest in an index fund or ETF. One good place to start is Acorns, which allows you to use pocket change to start investing in ETFs.

We also suggest picking up a couple of books to learn more about investing:

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This week, our listener asks about investing with a small amount of money. The good news is that you can invest, even if you feel like you’re broke. We talk about different choices you can make when you’re running low on funds, and how to make the most of each dollar. You can also read our article on how to invest when you’re broke AF.