Buy low, Sell high

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You might have heard this mantra from some FB stock trade group. Though such was commonly used by entrepreneurs who are in the retail business. I remember when I was still job hunting after failing my first attempt at the CPA Board exam some years back. After about a month of escaping the reality that I didn’t pass I went out to look for a job.

source:http://www.glogster.com/

source:http://www.glogster.com/

My friends and I usually grouped when job hunting so that at least we are a bunch in an employer and that won’t make the rest of our employed life boring. Before I don’t really now about job titles. Some look fancy and some seems in line with my field of accountancy. Thus we ended up in a weird interview one day where after the first screening we were all in a hall and this guy was telling us a story about one guy who works as waiter at the same time as an agent for this card(the position was for a marketing company for a certain credit card). He was actually talking about how to market in this new age.

After the talk we all never came back for the second round because we weren’t at ease with what with gone through. Selling is one of the necessary skills when you get to run your own business. IN order to earn you need to sell your products or sell your business. Selling does not only belong to the retail business. A service business even you as an employee have to sell your skills to the human resources department of the company you are applying for. You need to convince them that you are the right person for the job.

Same is true in stock investment. You need to be good at selling to earn profit. The only difference in stock investment is that you don’t get to prepare the stocks you hold to be in demand rather it just happens. The problem now is when to buy it low so that you can sell it high. Stocks are commodities that change hands as a millisecond thus you need to know in advance how to buy low in order to sell high. Forecasting and planning are the greatest skills you will need to make a great buy so that you cans ell it high.

But again always remember that no one has ever predicted the stock market 100%, only precise decisions were made by great stock traders that you read in papers or heard of. But again if you look at it they have done a great deal of forecasting and strategy to get to what they expected(except for cases of insider job and stock manipulation of course).

Key things haven’t change that much when it comes to stock investing/trading:

  • Know the stocks you are buying
  • Observe/track the stock’s movement
  • Buy at Entry Price
  • Sell at Target Price

Know the stocks you are buying

Always do the leg work. Don’t buy a stock because somebody says you to. Make sure that yourself understand the company. You know its standing, the business or industry it is into, any changes in management, and occurrence that might impact its profitability and stability.

Observe/track the stock’s movement

A stock’s price is not going in a straight line, if that is the case nobody would invest in it. Stock price moves up and down depending on the demand-supply forces that come into play. Tracking it will help you at least forecast where it is going. Also knowing its history and its nature might help you pinpoint at what price and occurrences might affect the stock’s trend where you can capitalize before anyone else does.

Buy at  Entry Price

Entry price is your targeted price where you expect the stock to be affordable yet keeping in mind the profitability it will return in the future. Other call it buy below price or ideal bid price. When you think the stock’s price hit this price level and it will bounce back it is better to start buying while at its lowest to have a higher potential gain when it goes upward.

Sell at Target Price

As always told tame your greed. Once your stock reaches its target price you got to start selling. Who knows when will it drop.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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