Warrior Trading Blog

When is the Best Time to Buy Stocks?

When is the best time of the year to jump into the stock pool? When should you buy? When prices are low, or when prices are high? A lot of potential investors seem to carry a pre-conceived notion that there’s a ‘perfect time’ to start buying stocks, and the slither of time in which the opportunity for reward is at its highest peak closes up before the realization that it was open. When the market goes up a little, potential investors may become intimidated at the rising prices and will want to hold off until the market drops just as slightly as it was raised.

People don’t want to feel as though they’re buying high and missing out on a better opportunity with their money, so it’s natural to wait until the price lowers to want to get acquainted. Unfortunately, more often than not, the price actually does go down and sure enough, it’s not enough.

People typically would want to wait just a little more so they feel that they’re really getting the best value for their money, only to back out when the price does drop further due to worry of a financial collapse. Then once the fire gets put out and shares start rising up to even higher levels than before, they have already missed out on a crucially time-sensitive moment due to lack of action because of unwarranted fear.

Jeremy Siegel, a professor of finance at the Wharton school, researched and analyzed the stock market returns from 1802 to 1997 and his in findings came across the conclusion that in total returns stocks has outperformed all other types of assets, including bonds, CD’s, and U.S. government securities.

Historically, the long-term trend of the stock market in the U.S. has always managed to find its way up into an upward spiral. Yes, there have been periods of staggering wealth which were immediately followed by heart-shattering downturns, such as the crashes of 1929, 1987, and 2008. However, in the grand scheme of things, no depression has been so traumatic that the economy never eventually recovered.

The prime objective for a publicly-traded company is to show their shareholders and consumers the potential of their growth. Every new fiscal year that comes by companies always look to increase their efforts and results from the previous year. Companies are designed with the intent to grow, so be sure you’re ready to grow with them. Here are four tips as to how you can invest with the mentality of a billionaire right now, without having to have billions in your account.

Buy What You Know

As the world-renowned financial investor, and CEO of Berkshire-Hathaway, Warren Buffett said, “if you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes”. If such a philosophy holds true for a person in Buffett’s position, why shouldn’t it also apply to you? Once you find a company you think would be a good fit for you in terms of price per share and industry, take something – could be $5,000 or $500 – no matter how little and use it in a way that could beneficially impact your future.

As a matter of fact, the hugest booms in the stock market have occurred, and still are occurring, with the past two years. Here are some examples of four of the biggest companies today approaching 2019 compared to what their share value was on December 30th, 2016.
12/30/16 11/7/18-Nike: $50.83 $76.57-Apple: $115.82 $203.77-Netflix: $123.80 $310.84-Amazon: $749.87 $1,642.81

That being said, one of the most important things to keep in mind when stock-searching is to only go into industries which you are familiar with. In other words, don’t start investing heavily in a mass media company when you barely watch any T.V. Instead, if you like fashion, you can choose to invest in which clothing brands you think are most trendy for the long run. Keep it simple for yourself, investing will be way more enjoyable if you know what you’re doing.

Get to Know the Company

Understand what really goes into a stock aside from the current price per share the potential future gain of profit. Keep in mind key factors that vitally supplement the overall prosperity of a company, such as their product(s) or services, the current market competition, patterns of company earnings, ethical management style, and supportive customer base. These intrinsic qualities are priceless in terms of intangible assets that come with investing in a company’s future earnings.

Gain Experience

Investing was never meant to be taken as a one hit wonder that happens overnight. While opening an account and proceeding with your initial investment is a tremendous start to your investment process, that’s all that it is – a start. Keep the end goal in mind, just be sure to give some thought to those goals.

Invest for Big Picture

The goal in mind when it comes to investing in stocks should be along the lines of moving towards being in a position where you don’t have to work for your money, and instead having your money start working for you. When a company you’ve invested in brings in revenue and pays out a dividend, you have then put yourself in a position where you suddenly have multiple options on how your money can work you.

One way to look at the dividends as an income of itself, or you can choose to have dividends automatically reinvested for future growth. The best part is, once you start reinvesting, its effortless with little to no strain on your part as an investor and your money starts working for you.

Investing in mutual funds can provide a smooth transition into the world trading. Mutual funds are fantastic in that if your starting off in stock investing and you don’t have much knowledge on which ones to get into, a mutual fund is a promising way to diversify. In other words, let someone else who’s a long-time financial expert in analysis figure out which companies are best to invest your money in, taking out even the little bit of hassle that comes with having to choose and invest in stocks.

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