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The Golden Rule Of Investing

How many times have you heard investors use the phrase “buy low, sell high”? Too many times? Too often? It is quite interesting how people continue to use this phrase and consider it the golden rule of investing, but actually do otherwise.  Why do we keep doing things that are outside of what we think is right? The team of experts over at Online Trading Academy have figured out that despite our understanding of buying low and selling high, we sometimes continue to succumb to the number one temptation that exists for investors and traders alike – our emotions.

You may start to shake your head and say that you only make decisions based on financial principles and fundamentals, but it’s so easy to overlook these when you let your feelings rule over your choices. For example, if you start to see that the stock market is starting to show some decline, you start selling low just because you see other people do it. And then the market improves, your investments become a lot steadier, and now you start to buy higher. While it goes against what we call the golden rule, more and more people go against the grain because they follow their instinct.

Keep in mind that there are no guarantees when it comes to investments, but you also have to make sure that you are able to keep an objective eye in these situations. Sure, everyone understands that there is absolutely no way that you will consciously choose to lose money, but because you can get carried away with the things that are going on around you, it happens before you even notice it. Stop trying to predict what’s going to happen next, because we will never really know. What is important is that you are able to back it up by data, analysis and an expert in the business. Good luck!