Monday, 8 May 2017

A sound mental approach towards stock fluctuations (4): Advancing, Bull or Rising Market

Advancing or Rising Market

The investor is neither a smart investor nor a richer one when he buys in an advancing market and the market continues to rise.

That is true, even when the investor cashes in a good profit, unless either:
  • (a) he is definitely through with buying stocks - an unlikely story - or 
  • (b) he is determined to reinvest only at considerably lower levels.

In a continuous program no market profit is fully realised until the later reinvestment has actually taken place, and the true measure of the trading profit is the difference between the previous selling level and the new buying level.

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