|>>|| No. 7333
>My money bloke always says 'if they're talking about it, you're three months late' which seems to hold pretty true.
You could also call it the stock price paradox.
Given enough time, most stocks will almost invariably go up. But when you get in, they will almost never go up. At least not right away, and that's what discourages many investors who then get out as the stock tumbles. But only to see the stock climb again and far beyond their sell point in a few months' time.
In the short term, it's almost impossible to tell, especially for a small retail investor, which way a stock will go. And it's also why short-term traders fail, because those who dictate stock prices have realised it's a magnificently easy way to empty the pockets of more gullible investors who think they can make money betting on short-term ups and downs. It doesn't matter what you do, you have no way of winning this game.
It'd be easy to think all you'd have to do is buy stocks that are down or otherwise cheap, but the problem is that you might well end up buying a stock that either isn't going to do much for the next five years, or if a stock is in a downward trend, you simply have no way of telling if it's going to go down another 20 percent before it really picks up speed to the upside again. Trends tend to perpetuate themselves. Until the day they don't.
What you need in the stock market nowadays more than ever is bulletproof nerves of steel that will allow you to hold on to a stock that you think is promising even if it slides ten percent in one day. And you need infinite patience. Sadly, those two are still no guarantee that you will be earning a noteworthy profit in the long term. But they are pretty much the conditio sine qua non of stock investing.