3 Steps to "Buy the Dip" and Invest Smarter
Have you ever wondered why "Buy the Dip" works in a long term strong uptrend or 'bull market' in any investments but the average investor fail to capitalized on this simple principle?
We all want to ride from the bottom to the top in any investments we choose to put our hard earned money in and hopefully this will help to think twice before you jump into the next HOT investment.
Let take a look at this simple graph below.
The bottom line is... it takes patience, discipline and good observations to make smarter investment decisions. Anyone with the will power can do it. Some people think you have to be super smart to be successful in investing and that is definitely not true.
Spotting good investments is only secondary as you will always be hearing some stock made 52 week high or a friend of yours told you he/she just made so much money buying an IPO (Initial Public Offering) (think Facebook and it's subsequent 'mini crash'), or even your neighbor telling you to get deeper into housing right before it crashed in 2008.
Here are 3 simple steps to help you make better decisions next time:
Identify an investment that has been performing well in the recent past (at least one year) but it has been getting a lot of attention lately and price has been rising rapidly.
Observe the price of the investment perhaps every month. Make note of any signs of change in trend , rapid decrease and subsequent stablization in price which would form something like a 'mini crash'.
If there is a change in trend to the upside at a point that is higher than the last episode of 'mini crash' you should seriously considering that as a buying opportunity.
Remember, there are so many different investments out there in this huge and diverse asset universe. DO NOT CHASE any one particular investment that everyone is talking about!
If you go through enough investments, I am sure you will find something that is very close or at a point of buying opportunity. Do some research on those opportunities and capitalized on them.
Some classics that you should consider reading if you have not:
- Reminiscences of a Stock Operator - Edwin Lefèvre
- The Intelligent Investor - Benjamin Graham
Wish everyone happiness and prosperity!
Very nice post. Thanks for the info. Resteemed :)
voted and following...and resteeming, which I rarely do!!!
This is awesome!!
A great reminder to newcomers...and a brush up to the rest....this is more important than ever in the dynamic crypto world!!
It's my first content ever on Steemit. Thanks for the support! Hopefully it makes us all wiser and not get hurt!
Exactly!!
Well done!
You will find more and more community here...and maybe even make some money off your awesome mind!! Keep it up...we all appreciate it!!!