Question.2550 - The age-old saying for investing is “buy low and sell high,” but this is easier said than done. Investors who are scared of falling prices sell their investments, which in turn lowers the price and then creates a snowball effect. Consider a situation where all of your investments are exposed to the stock market and prices are starting to fall. You do not need the money until retirement, which is in 20 years. How would you react to this situation and why? If you decide to sell, what would you purchase instead?
Answer Below:
According to situation scenario based upon investment, I would positively select not to appropriately sell alongside keep the particular stocks that I already have accordingly (because of massive 20 years till retirement period factor). The specific stock market unfortunately or certainly drops alongside precisely picks up continuously which will perform respectively for upcoming 20+ years. Selling stock rapidly and quickly while there should be any difficulty or trouble sign and would be unfortunate poor investment plan due to stock limiting scenario that are absolutely surrounded by growing on investments. As an outcome, stock is absolutely depending upon growing factor that are absolutely connected to market price alongside eventually capitalising the particular money. Apart from earning money, I would also trust and believe about market data you will go back precisely based upon time when I positively and automatically retire in upcoming 20 years. I also should be over precisely observe and look out alongside add stocks towards my portfolio while the specific market certainly drops due to stalks uncertainty and it becomes cheaper at certain point. Stocks becomes easily cheaper and also accountable for enhancing in value which shows the stock regarding market is appropriately goes up. If I had been two years till retirement period than I could be nervous automatically and I also would require the specific capital becomes suitably & positively before specific market is having an opportunity to enhance alongside get back towards "normal” position. It is absolutely advocated for particular investors and also why less and appropriately sell high while the particular share prices should be initiated to unfortunately fall. According to Choi & Robertson, (2020), it becomes quite critical and hard to precisely fix to stick towards investment and investors are appropriately starting to positively predict that trend will definitely being constant in future reasons. Reference Choi, J. J., & Robertson, A. Z. (2020). What matters to individual investors? Evidence from the horse's mouth. The Journal of Finance, 75(4), 1965-2020.More Articles From Finance
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