I understand buy low and sell high, but then what?
If, say the S&P500, keeps growing there is no ‘peak’ to sell at. Do the gains compound? if so how? Or do you just hold it forever and sell when you want to get the money?
In: Economics
>If, say the S&P500, keeps growing there is no ‘peak’ to sell at.
First, there are lots of peaks — it doesn’t go up every day, so it doesn’t make new peaks every day. In fact, you know that because it still makes the news when it sets a new peak. When you hear that news, most stocks are the most expensive they ever were.
When the stock market crashes, think of it as a “big sale at the stock store”.
>Or do you just hold it forever and sell when you want to get the money?
How do you know when to pull money out of your bank account? It gets interest too. It’s the same thing. Only your bank account doesn’t occasionally cut itself in half, but stocks do that all the time.
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