What question is the most difficult to answer regarding investing?
Do you think it is:
- What to buy?
- When to buy?
- When to sell?
Are you thinking the hardest part of investing is “when to sell”? This is probably the most common question, but it is not the most difficult.
A YouTuber with over a million subscribers read my blog. I was surprised! Hours before he subscribed to my blog, I was contemplating quitting posting. The act of starting may be a challenge when it comes to being out of our comfort zone, but it is not the most difficult task.
What to buy is easy – buy an index fund like Warren Buffett and many others recommend. You can invest in this manner your entire life. Have you ever wondered why Warren recommends index funds? Do you know he owns stocks? Why does he not recommend purchasing the stocks he owns? To make matters worse, you can find articles about monkeys choosing stocks being compared to financial advisors or so-called the best stock pickers.
“I do not want to buy, now. The market is too high!”
“Buy low, sell high.”
“Buy the dips.”
“Start early.” What happens if you don’t start early, should you invest?
Seems like “when to buy” is becoming as convoluted as “what to buy”. No wonder individuals are poor.
If there are many philosophies about buying, then you can expect there are going to be as many or more pertaining to selling.
Does investing seem overwhelming? Are you rethinking which is the most difficult question? Do you wish investing were taught in school year-round for K-12?
Investing is more than putting money in the stock market. A YouTuber with over a million subscribers reading my blog hints at the most difficult question. “Buy low, sell high” gives another hint. What is the purpose of the expression “buy low, sell high”? Believe it or not, it is similar to the phrase: do well in school, get a good job and work the rest of your life.
Buy low, sell high:
- Is one reason why Warren Buffett says to invest in index funds.
- Should inform you that the one saying this does not know much about investing in the stock market unless they explain themself. (I will provide one of many explanations in a moment.)
- It suggests an ability to know the future – to predict the market. (News flash!!! Six months or so after you read this article, and that can be 10 years from the date published, the news will say either so-so called the crash or you-know-who predicted the rise.)
The “buy low, sell high” mentality is merely a should I continue mindset… This holds true for mutual fund managers as well. The story about the monkeys picking stocks and Warren Buffett’s million-dollar challenge exemplifies the should I continue mindset. I am not promoting index fund buying. On the contrary, while I believe in passive investing, I adhere more to Peter Lynch’s style of investing. Put another way, I believe I would outperform index fund investing and would gladly accept a challenge from Warren Buffett.
I asked myself if I should continue writing this blog when a popular YouTuber visited my blog. This is investing, just not in the stock market. Should I continue working at the same company or should I change jobs? Should I continue creating YouTube videos or should I change the style or format? Should I continue to diet or go back to my old ways? You are investing in your future, your health, yourself.
I am sure you have heard the war stories of how people invested in the stock market and lost everything. Do you think they should continue investing in the market? I hope you said, yes. Are you investing in the market? Should you continue not investing? The answer to this is the other side of the coin. You probably heard the war stories of those who have to nothing for retirement.
The successful YouTubers, Olympians, Entrepreneurs, etc. asked themselves the same question. My goal is to help you invest in the stock market for your future. To do that I remind you that you need to believe in yourself. You need to put in the effort and have patience. If you compare yourself to others, then remember that they went through similar struggles.
I will discuss some flaws with the “buy low, sell high” mentality in upcoming blogs.
Financial Education with Louis 