Breaking the Rules
Many investors assume that the ideal investing rule is, “Buy low, sell high.†But it’s not the only rule that can guide you to profitable investing.
For example, “Buy high and sell higher†has worked quite well for many investors who have decided that some fast-growing companies are worth above-average prices and valuations.
Another twist would be, “Buy low, sell never (or at least not for a very long time).†Often, investors sell out of a winning stock too soon. If the business is going well, and the long term looks bright, your best strategy may be to hold on even if the stock appears temporarily overvalued.
Don’t be afraid of being contrary in other ways. If many investors seem to be turning away from a company, it could be an ideal time--after researching the company thoroughly--to consider buying shares.
You can see contrarian investing at work in some of our real-money portfolios at Motley Fool online (https://www.fool.com/strategies .htm).
The bottom line: You don’t need to follow any herd or dictum to succeed in investing.
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