I read that professional investors buy stocks, when stocks price rise or is high. Is it right?! In my opinion, you must buy stocks, when stocks price is falling or is low. Who is right-explain!!!
2006-12-13 06:57:57 · 7 answers · asked by didiyouknowmsnisbetter 1 in Business & Finance ➔ Investing
Technical analysts always buy when stocks are going up. Their reasoning is that a trend in motion tends to stay in motion. And more times than not they make money as a result. Newton's 1st law of motion. It also applies to price trends as well as bodies.
2006-12-13 09:40:01 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Both are right, in a way.
One side is called contrarian, which some folks confuse for the old "buy low, sell high" nonsense. When folks are selling off a good company because they want to move their money to the next fad, then some will see a bargain in the making. I've bought more shares of companies in decline in order to average-down my cost basis because I expect or expected an upturn. But, caution, sometimes the stock is going down for a reason--something may be horribly wrong and if you don't catch it, you will lose big time. I did that recently with an oil services company and a VOIP services shop. Some in the market knew things, or details, that I didn't spot.
The other side is also sometimes misunderstood. Buying a stock when it is high is sometimes very prudent--simply because you have reasons to believe that it will go much higher!
Just because you read in the paper that some XYZ company hit its 52-week high or low does not mean that is the stock's ceiling or floor. Buying Apple before the ipod came out would have seen the stock hitting ceiling after ceiling after ceiling. Ask folks about Enron, which essentially punched through both in the same year.
2006-12-13 07:19:21 · answer #2 · answered by Rabbit 7 · 0⤊ 0⤋
There are a lot of different approaches. There are well known and successful people who've used both approaches. The best explanation of wanting to buy stocks at new highs is offered by William O'Neill in his book "How to Make Money in Stocks". His point is that the huge gainers of all time are making new highs every step of the way up. So a stock that goes from $20 - $200 is going to make a new high at $20, $21, $22, etc all the way to $200. To say that you aren't going to buy a stock that is at its highs by definition eliminates you from all of the huge gainers because they will be close to their highs.
The other side of the coin is to try and buy intrinsic value. Over the very long term, if you buy something that is worth $20 for $10, eventually you ought to do very well, its price ought to return to $20. I'm not a believer in efficient markets, so it may take a while for the psychology in such a market to turn around. Warren Buffett is someone who is usually looking to buy stocks for less than their underlying value.
Both these guys are worth reading, and reading about, even though they have opposite approaches to the market.
2006-12-14 13:41:16 · answer #3 · answered by Alan 3 · 0⤊ 0⤋
pros buy either when they think there is an opportunity that they ned to catch right then, or else when they think they are getting good value. if a stock is rising and you buy, and it keeps going up and you sell, you made money. and if you had waited for it to come back down, you might have had to wait a while to get your money out of it. and these terms like high and low, and cheap and expensive are really relative to the price and the vaule of the stock. a stock can be really expensive in terms of dollars, but be cheap in terms of the future value. yeah of course it's always better to buy a stock for the lowest price, but that can take a backseat to getting a quick gain, and i doubt what you heard is really true anyways, you might have misunderstood or taken it out of context
2006-12-13 07:10:31 · answer #4 · answered by C_Millionaire 5 · 0⤊ 0⤋
Professionals buy when stock prices are low and sell when high. For professionals there are many methods to make there investments to grow which are not possible to explain openly.
2006-12-18 03:50:12 · answer #5 · answered by Mathew C 5 · 0⤊ 0⤋
This penny stock service has years of proven experience. Ultimately it is the best service for beginners to use https://tr.im/t6HK8
You will have to wait between 3 and 10 days to get into the system in most cases. When I signed up it took 8 days. I wished it was faster, but if you can wait a week or two to start earn life changing money than you will have what it takes to make it in this business.
2016-02-15 15:14:50 · answer #6 · answered by ? 3 · 0⤊ 0⤋
Professionals buy when stocks are cheap and sell when they are expensive. cheap does not necessarily mean low, just as expensive does not mean high. brk-a(Warren Buffetts) trades at about 109,000 per share where as SIRI(sirius satellite radio) trades at 4 per share. I would argure the brk-a is cheap and siri is expensive
2006-12-13 07:04:45 · answer #7 · answered by samsosa2000 2 · 0⤊ 0⤋