When you buy a stock, what do you hope will happen? The answer seems obvious. You want it to go up. Every rational investor begins a relationship with a stock this way.
But something funny happens here – both before, in the selection process… and after, once the stock shows its stuff. Beforehand, investors cringe at the idea of buying stocks that have already gone up a lot. This is a mistake, but I get why people make it.
As consumers, we’re trained not to buy that widget we want when we know it was cheaper a few weeks or months ago. We seek deals in nearly all the spending we do.
On the contrary, you should buy stocks that are going up.
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