There are a million stock market clichés. You have heard most of them, here in articles and comment threads at Seeking Alpha. You have heard them from your mom and dad, who were stock market investors and if you lived during the go-go stock market days of the late 1990s, then you heard them from your barber, the guy who changed your oil, the guy who sold you groceries and everyone else who was investing in the stock market.
My favorite cliché is “Buy low, sell high.” It’s simple. It’s concise. It is pure genius.
But it is probably the most ignored stock market cliché of all.
What You Should Know:
Most investors do not “Buy low and sell high.”
Most investors don’t even come close to “buy low and sell high.”
They don’t because most investors live in a world that is surrounded by fear. There are so many different fears out there that one can honestly say they outnumber stock market clichés.
Many investors rationalize their decisions to not be investing in out-of-favor stocks. The most common refrain seems to be, “The market is at all-time highs, so I’m not buying anything here.”
Even worse are the folks that are presented with an investment thesis for an out-of-favor stock, like Target (TGT) for example and their response is “Well, everyone knows that retail is dead and investing there is like trying to catch a falling knife.”
Investing in stocks when no one else seems to want them is a recipe for capital gain opportunities that many investors seem to continually miss.
What Are You Talking About?
As a Dividend Growth Investor, also known as “DGI,” I like to invest, for the most part, in companies that have a history of increasing dividends annually, for at least 5 years in a row. I like those dividend increases to be in excess of 6% annually, so that I am able to stay ahead of the underlying inflation that we all have to deal with, living in the USA.
That being said, I also like to purchase shares in these dividend growth…