Image Credit: Alex Nabaum
The market wisdom that sounds the easiest can be the hardest to follow.
Take “buy low, sell high.”
Buying low and selling high is logically sound but emotionally harrowing. That’s because it requires buying something that feels risky because it just went down, while selling something that feels safer because it has just gone up. That counterintuitive step is what investment professionals call rebalancing: moving against the market’s recent direction to adjust your mix of stocks, bonds and other assets back to predetermined targets.…
Read the rest of the column
This article was originally published on The Wall Street Journal.
Further reading
Benjamin Graham, The Intelligent Investor
Jason Zweig, The Devil’s Financial Dictionary
Jason Zweig, The Little Book of Safe Money
Jason Zweig, Your Money and Your Brain