WEALTHY & WISE
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PAGE 14
Chasing The Highs A stock does not become a good buy simply because its price has been rising phenomenally. Once investors start selling, the price will drop drastically. Ditto with a mutual fund. Every fund will show a great return in the current Bull Run. That does not necessarily make it a good fund. One must track the performance of the fund over a bull and bear market, watch out for portfolio quality & valuation before making a choice.
Quitting In a Hurry The desire to be right about timing the markets is very high among investors. Coming off from a peak market into a trough creates anxieties. Stories about how people lost all the money because of not getting out at the right time, start flashing vividly in minds of investors. Tentativeness about how far the markets will run up will increase as naysayers point to the end of the bull market with every rise. Remember that a bull market is never a linear path and is characterized by its highs & lows. No one knows how far your stock/fund will run and you may regret quitting too soon. Allow your gains to be compounded.