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

Don’t get caught in the buy low and sell high fantasy. Your path to best long-term results is boring AF.

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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:

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Hardcover)


List Price: $24.95 USD
New From: $16.79 USD In Stock
Used from: $6.07 USD In Stock

Oblivious Investing: Building Wealth by Ignoring the Noise (Paperback)


List Price: $15.00
New From: $62.96 USD In Stock
Used from: $43.10 USD In Stock

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.

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[A073] Money Mission Impossible: Buy Low and Sell High was last modified: May 25th, 2017 by Harlan and Miranda

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