Buy Low and Sell High

"In theory, there is no difference between theory and practice.  In practice, there is." ~ Yogi Berra

 A great investment adage is " Buy low and sell high."    The trouble is that the advice is very difficult to execute.   The results is traders and investors often buy high when the market is euphoric and sell low when the market is depressed. 

Here's how I try to manage keeping my emotions in check:

• We have a core portfolio that we do not trade.   These are my wife's accounts, in which her holding period is forever, and our managed accounts.  For the managed accounts, I will sell periodically to take profits, but will  not go below the investment minimums.   Thus, we are always "invested in the the market" with part of our funds.
• In our trading account, I am biased towards buying when the market declines and biased towards selling when the market rallies.
• Since equity trades are commission free, I will scale in when buying, as little as one share at a time and scale out when selling, as little as one share at at time.  That way, I don't feel regret if the stock falls after buying or rises after selling.   I still have more to buy or sell.   The downside is I only buy a few shares at the bottom or only sell a few shares at the top..

It has been working for me in the 2022 kangaroo market.   Of course, it will probably only keep working, until it doesn't.

For more on  The Practice of Personal Finance, check back Wednesdays for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

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