I thought I’d share with you one of my favorite pieces of financial advice:
When to buy: When you’ve got money to invest. (“When you can”)
When to sell: When you need to liquidate something in order to pay your bills. (“When you have to”)
Note that none of the following words are included: market, attractive, up, down, high, low, P/E, indicators, chart, floor, ceiling, timing, bear, bull, analysis, economy, or prediction.
It’s so simple that people have trouble believing it. (Admittedly, believing the simplicity of the buy/sell decision is made more difficult by the fact that there’s an entire industry that depends on convincing us that it’s not simple.)
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{ 3 comments… read them below or add one }
I love this post. After going on at length about fundamental analysis yesterday, you have made my ramblings somewhat meaningless
At any rate, I love how simple you have made it. Classic.
Hi Miranda. Thanks for the kind words.
I actually quite enjoyed your post on fundamental analysis. In my opinion, if somebody’s going to try to pick stocks, they might as well base it upon real information about the underlying company.
You should also sell when you feel that your investment hypothesis has changed or your investment is overvalued.