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
You buy it at one price and then your hope is that it goes up. Then you sell it. You started with the original price and now you have more money because you sold it for more.
It goes up either because the company is worth more or people think it’s worth more.
Theoretically the s&p could go up forever, and it probably will because of inflation. The s&p is also a group of top stocks that changes. It’s basically just all the biggest companies so it’s a pretty solid representation of the market. If one company completely fails, then it just drops off the list and another one takes its place. It goes down if the whole market goes down.
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