How Can Stocks Buy Low And Sell High?

We all know that the stock market will move ahead of the economic situation, so buy it after the good news is released.

Now, the National Bureau of Economic Research has officially announced that the economic recession that began in December 2007 ended in June 2009. Now, the crystal ball of the stock market is somewhat muddy.

The Standard &Poor 's 500-stock index rose to its highest level at 1565 in October 2007. It dropped by nearly 8% in November 23rd. It was a bit shocking, but it did not come down to 20% in bear market or usually the decline in the recession.

By the time the crisis really started, the stock market was quite strong, and the S & P index in May 2008 was 1427.

The stock market has hardly or even failed to provide investors with harbinger of the coming big crisis.

In March 2009, less than three months from the end of the crisis, the S & P index dropped to a minimum of 677 points, and by May, it had surged 30%.

This is a fairly clear signal, but it is three months later than before.

The stock market reflects the collective wisdom of countless investors, so it should be the best prophet we can be able to teach.

But it is not good enough.

The recent performance of the market has convinced me that no one can predict the future. This is also a basic prerequisite for opening this column.

It is ineffective to invest according to the sense of the future of the market.

Sadly, for most investors, such an operation means high buying and low selling. If we use common sense method, we will not have such a result.

I strictly believe in the following criteria of personal investment: try not to make decisions emotionally, to respect the past and not to try to predict the unknown future.

In this column, I share my investment decisions with you, and the final results are published and shared with readers.

According to common sense, I never buy stocks at the peak of the market, nor sell them at the bottom of the market.

Like all investors, my goal is to buy low and sell high.

I never declare that I have found the best opportunity.

No one can consistently and accurately predict the heights and lows of the market.

But my goal is to make profits, which is over the average profit level in the long run.

So far, my goal has been achieved.

Even in the most turbulent period of the financial crisis, a hypothetical portfolio made by this strategy is better than the S & P 500 index.

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Common sense method is also simple to operate, without computer or high speed.

I am an on-the-job journalist, not a stockbroker or a hedge fund manager.

But I firmly believe that anyone can manage their portfolios so that they can outperform those who simply follow up index buying and holding.

This method operates in this way: when the market is down, I buy when the stock is 10% lower than the recent highest value; when the market is rising, I throw the stock at 25% higher than the recent minimum.

The average loss of bear market since 1979 is 20%, and the average yield of bull market is 50%. These two figures are exactly half of the average.

All integers are easy to calculate. Mental arithmetic is OK.

I use the Nasdaq composite index as a reference. On the one hand, when I started using this method, I was holding mainly NASDAQ listed shares, and because the NASDAQ shock degree was slightly more intense than the S & P and the Dow, it also provided more trading opportunities.

Those who want to buy and sell less frequently may prefer other indices, but for me, the index is the most appropriate.

Every time I get to the critical moment, I will wake up the reader and share with you my decision to buy or throw.

My current expectations are 2025 and 2600 respectively.

This method sounds easy to operate - the concept is also very simple - but it is strange that sometimes it is difficult.

I also remember a cocktail party in October 2008.

When I came to speak, I said I bought shares in the morning, and everyone else looked at me with a look at the Martians.

The S & P 500 index is about 840 on that day.

On Friday of that week, the S & P index closed at 1149.

Of course, this column is going to explore not just stock market manipulation.

As a journalist, I always come up with some strategies through the interpretation of the latest news. I use these strategies myself, and share them with my readers.

My basic strategy may be basically the same, but I will often change stocks and industry choices.

Most importantly, I find investment and analysis of the stock market exciting and interesting.

Besides economic rewards, it is also an adventure and learning.

I hope you can share this experience with me all the time.