Buy Low, Sell High

The idea of buy low and sell high is the basis of all business. The difference between the buy and sell transactions is profit. To make a profit is the reason why we buy and sell stocks. But while it is the one axiom most every investor understands, it is also the one that many have trouble implementing.

Cyclicals can be a good choice if an investor wants to buy low and sell high on the same stock. When they cycle down, buy. When they cycle up, sell. The only trick is to understand when the change is coming.

In using the simple buy low, sell high strategy, if the companies are carefully selected as fundamentally good companies, the rewards from stock ownership can be good and sometimes great. It may take some time and patience for the stock to perform well, but it is often worth the wait.

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