Buying the dip or exiting the peak? Which one is more important for you?
Welcome to Thursday Special!
In this wild ride of stocks, jumping in and making an exit both have their spotlight moments.🏄♂️📈
The buying price directly impacts your investment cost and potential gains, while the selling price determines your investment returns and serves as a safeguard against larger losses.
Today, let's discuss which you believe is more important and why.
A. Buying Price
B. Selling Price
Share your investment philosophy! Let us in on your perspective—whether it's all about seizing opportunities at the entry or executing a chic exit."🌈✨
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🌟🌟🌟Buying the Dip or Exiting The Peak are brilliant strategies to use in investing but it implies Timing The Market. Nobody can tell exactly when is the Dip or even when is the Peak, not even the experts unless perhaps if they have a crystal ball into the future.
However there is one lesson that I learnt is that the best time to buy stocks is when there is a wave of panic selling. It takes conviction and courage to do so. As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy.
Exiting the peak implies knowledge that we know when is the peak. Take for example $NVIDIA Corp(NVDA)$
When Nvidia hit a 52 week low of USD 138.84, it takes courage to hold on to it. Who could have predicted that Nvidia would rise to 228% year todate to reach USD 469.59 and joined the Trillion Dollar Club? Not even Cathie Woods who sold Nvidia way before it reached that euphoric height.
I believe that it all comes down to buying quality stocks that we believe in and holding them long term to allow the magic of compounding to happen. That's how fortunes are made and that's how Warren Buffett became a Billionaire.
As Charlie Munger, his friend and partner would like to say - The Big Money is in the Waiting, Not in the Buying and Selling!
@MillionaireTiger @TigerStars @TigerClub @Tiger_SG
however, if you force me to pick one of them it would be the selling price. that's because when you buy something, you will automatically determine your selling price in mind. thus, you calculate to secure your profit. that is also the reason why you feel secure even when you buy a stock at a relatively high price. in addition, you can buy a dip but you will feel very vexated when you sell it at one point and then the price of that stock is still going up. in conclusion, maximizing your profit is the most optimal way that all people seeks.
@icycrystal @Shyon @LMSunshine @DiAngel @MHh @Bons @Aqa @rL @HelenJanet @SirBahamut @GoodLife99 @melson
for other cases, such as buying price not the lowest or selling price not the highest, investors can't get the maximum profit.
therefore, both buying price and selling price are equally very important.
also, one last thing, don't buy high sell low, because that means losses, okay? [Chuckle] and remember to do homework, do as much homework as you do, just keep doing homework, and don't copy hor. [Chuckle]
Both selling and buying prices are important as the difference is profit!
The underlying strategies may differ.
Investors generally hope to buy at low price and sell off at high prices. While waiting for the price to pick up, it would definitely be better if dividends can be picked up along the wait. The problem with buying the dip? You never know when the dip continues to dip... and you feel like u have caught a falling knife and became a bag holder...
Traders typically buy at a reasonable price if their analysis shows that the price has more legs to climb. Basically, it can be buy high but sell higher.
It is also possible to combine strategies. For example, I may be keen to hold a good stock for the longer term. However, I can also choose to exit at the peak to take profit first. When the price falls but the stock remain fundamentally sound still, I will buy it back. The risk of course is, I may not be able to buy it back at a lower price in the short term if it continues to climb further.
The ideal state is to have both fundamentals and be able to do technical analysis. The only thing that is probably out of the hands of both traders and investors is market sentiment that are caused by external events such as rate hikes, wars, covid. Both groups are at the mercy of the market. That said, it is also possible to profit in such circumstances, especially those nimble enough to change strategies. Thus, it's always buy within your risk appetite and to stay safe!
If you buy the dip but sell too soon, you’re a fool. If you exit the peak but dont know when to buy again, youre just a one shot wonder.
Invest wisely Tigers! [Grin]
you don't want to buy high and sell at a loss.
some stocks are cyclical, therefore, need to decide which to buy and which to sell to maximize profits and balancing portfolio according to your investments objectives.
as for some stocks, hold them long, as long as possible especially those that give good dividends and have good strong fundamentals.
don't forget the fees charges as well because these will eat into your profits.
There is only 1 reason to buy and many reasons to sell. This is especially true for option sellers as the strike price and delta selection will basically determine upfront the probability of profit as well as the max profit of the position.
This is also the reason y i personally dislike buying options, as the exit condition has too many considerations. 1. Price of option 2. Time decay 3. Volatility. Its the similar issue when exiting stock positions. What if, the stock goes up, what if theres gd news after i sell, so many what ifs can happen.
I will rather control what i can control (buying criteria), then struggle to control what i cannot control.
如何判断高点和低点，是一门学问啊，好几次我觉得到高点了，抛了股票，但后来发现那是起飞🛫️的起点，哭晕😵💫
But if forced to choose, I would go with buying price or entry point. From my experience albeit limited compared to other esteemed members, a wrong entry price has given me a more challenging connundrum to solve rather than the exit. Let me explain.
When I enter too high in a long position, I have to ponder if I should add more stocks to dilute my holding cost so that I can increase my chances of making a profitable exit. Otherwise, I am stuck holding and praying for the shares to go up again, which takes the ball out of my hands and into the mercy of the markets. I'd prefer to be in control of my own destiny.
In contrast, if I had entered my positions well, an unfavourable exit merely leads to a loss in terms of missed opportunities.
For traders, buying and selling actively is the way to multiply their capital, but that requires knowledge in technical analysis and time consuming to watch the changes of price closely
for investor, buy price is more important as buying the dip means it can go a longer way to maximize your returns.
for trader, selling price is more important as it is based on market sentiments and whether a profit can be made in short term. Always aim to sell higher than buy price in uptrend market or short in downtrend market.