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
Day-trading, buying at troughs and selling at peaks, is gambling. People who really invest in stocks do so because, over time, most stocks will go up, because the economy as a whole continues to grow.
Obviously some businesses fail and their stock value plummets, but if you invest in a spread of stable, reliable companies, you’re essentially putting your money in a bank with a lot higher interest than your literal bank. There might be temporary ups and downs, but over time the average trend is up, and yes, you cash out when you need the money, like to invest in a house or to pay for retirement
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