SEOUL, South Korea — Currency dealers monitor exchange rates in a trading room at KEB Hana Bank in Seoul on March 13, 2020. Global stock markets suffered historic falls as panic spread on March 13 over the spiralling COVID-19 coronavirus crisis that has killed nearly 5,000 and affected sports, schools and societies across the planet. (Photo: AFP)
Buy low, sell high. This is the fundamental principle one wants to employ in order to maximise capital gains on their investment. Many apply this principle only to stocks, but it is just as applicable to bonds and mutual funds. In each asset class (stocks, bonds & mutual funds), one should look to buy when prices are low or below perceived value and sell when prices are high or above perceived value.
When market conditions are stable, the buy low sell high principle works well. However, when market conditions become volatile it may be difficult to determine when asset prices are at their lowest levels or are at their highest.
Because of the volatility and unpredictability, we must employ strategies which will take us through the volatile times and allow us to position our investment portfolios for growth when stability returns to the markets.
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