Buy Low, Sell High

The goal for any investor is to make money over time by investing in the stock market or any other market utilizing different approaches to accomplish their goals. Some investors seek to not just make money by accepting the market’s average rate of return but to exceed the market’s average return by as much as possible without increasing investment risk. Unfortunately, few investors have success attempting to consistently outperform the market for a variety of reasons which we have discussed in previous articles on our website.

Not all investors have the same investment style when it comes to deciding on an investment strategy in an attempt to outperform the market. Investors will have varied personalities and so will their investment strategies with types ranging from value, growth, and momentum to a combination of the three. There are also those investors who like to look at charts and graphs of individual stocks or indices with the goal of determining the right time to buy and the right time to sell. No matter what type of strategy an investor decides to employ, successfully outperforming the market consistently over time while maintaining a lower risk profile requires the investor to consistently find stocks that are closer to their bottom than their top. As the stock or index reaches its peak the investor must be ready to sell. Whatever holding period is chosen, the investor must be confident in their buy and sell signals.

Are you a value or growth investor? We would argue that successful investors who attempt to outperform the market are seeking the same thing and that is to buy stocks that they feel are priced lower than they should be regardless of style. So, at the end of the day, successful investors are all value investors whether you are attempting to buy the cheapest growth, value, or momentum stock. The best investors have a tried and tested approach that seeks out those undervalued stocks, industries, or sectors within the overall market with consistency over their desired holding period.

Building a winning strategy goes beyond “buying the dip and selling the rip.” Ultimately, a successful investment strategy must accurately signal when its basket of securities is overvalued, and which stocks are currently undervalued when it comes time to add stocks to the portfolio. In other words, your investment strategy should talk, particularly when there are great opportunities to buy and when it is critical to sell certain positions.

Here at Investoristics, our investment strategy has all that an investor needs to navigate any market whether the market is moving up, down, or sideways. If you want to outperform the market over time with consistency and comfort in declining markets, then our approach is right for you. If you have the time and want to build a winning investment strategy yourself, our advice would be to keep it simple and focus on the fundamentals and pit price weakness against fundamental strength. Keep playing with various concepts until you get it right but, in the end, you are just buying low and selling high. However, if that does not work for you, we have something that does, join “The Collective.”