The best time to buy or sell stocks
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By James K. Glassman, Published: November 12, 2011
In a time of market turbulence, with stocks losing altitude, it’s only natural to feel compelled to buy and sell according to your own forecasts of whether a stock — or the market as a whole — will rise or fall in the short term. My advice: Resist!
Unfortunately, the urge is strong — almost irresistible. It looks easy in hindsight, and the results are spectacular. Let’s pick a stock at random: Waters, a midsize manufacturer of high-tech equipment, such as liquid chromatography systems. Waters is not an especially volatile stock, yet in nine of the 12 years starting in 2000, its yearly high has been at least 50 percent higher than its low. In 2000, you could have bought 1,000 shares at $22, sold them in 2001 for $85, bought them back again in 2003 for $20 and sold them in 2011 for $100. Total gain: $143,000. But if you had bought the stock at the start of 2000 and held it continuously through Sept. 9, 2011, when the shares closed at $75, you would have earned just $53,000.