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>What is your investment strategy? Invest at the market/stock highs? I try to keep in mind that markets are unpredictable, and missing out on growth while you
by zardo 11y ago
>What is your investment strategy? Invest at the market/stock highs?
I try to keep in mind that markets are unpredictable, and missing out on growth while you wait for the next crash can cost you money too, even if it doesn't feel as bad as a position you hold losing value. I invest about the same amount every paycheck whether people are crying bear, bull, bubble, or apocalypse.
- throwaway_1010 11y agoSuccinct. Exactly. Dollar Cost Averaging. For buys and when buying call options or selling puts, I increase commitment while maintaining the core strategy. Highs and lows are arbitrary in an irrational market. Profits can be increased if buying at "relative" lows or selling at "relative" highs. If a stock that trades at its highest yet value of $100/share falls to $80/share over a week because of a lawsuit claim or other similar construct, but the company is otherwise outperforming, that may be a buying opp (it may be a total loss, but that differential is risk/opportunity). That stock, at $80/share is at a "relative" low as compared to its high of $100. That is what I meant by low and high. Perfect maximization is possible, though almost always unlikely. Which is why your DCA strategy should outperform (depending on your investment choices, of course).