Buy High, Sell Higher?

Investing is nuanced. Nothing is a one sized fits all approach. Some strategies work in a bull market, but not in a bear market. You often hear people say, “Buy Low, Sell High!” And that’s great for finding value stocks or very early stage growth stocks.

In a bear market, “buy low, sell high” is a great tactic.

But what about in a bull market when growth stocks are consistently smashing expectations? Waiting for a growth stock to drop 20% for you to “buy low,” isn’t always a great idea. Why? Because a 20%+ drop in a growth stock during a bull market could be a sign of bad news, bad guidance, downgrades, or overall disinterest in the stock.

That’s not good.

In a bull market, you might be more inclined to “buy high, sell higher.” After all, if you love a company and think it’ll be trading at a higher prices years down the road … it shouldn’t really matter WHAT the stock price is: A decade from now, you won’t be kicking yourself for buying at "$100 when you could have bought a few months earlier for $80. You’ll be bragging that you bought at $100, because now the stock is $500.

You won’t be mad that you bought a stock at all time highs. That’s what it means to “buy high, sell higher.”

It’s momentum investing. And it’s great in bull markets … but maybe not as great in bear markets.