Now Your Turn
A: Hey, Jack, I hear you become a millionaire by investing in the stock market. But I always lose money in the market. Can you give me a few tips?
B: First of all, let’s look at the stock listing in today’s newspaper.
A: Wow, the stock market dropped again.
B: What stock did you buy?
A: BCD.
B: How many points did it lose this time?
A: More than a hundred.
B: Let’s see…That’s a drop of nearly five percent.
A: Oh, there goes a lot of my money. I’m thinking about pulling out of the market.
B: Before you get upset, I’d like to give you some advice.
A: What’s that?
B: Well, the market is cyclical. Through you’re losing money now, your stock may gain in future. Personally, I believe your stock is a good one. You’d better keep it until it goes up one day.
A: So I can’t make money in a short time?
B: Let’s look at XYZ stock. It’s now a junk stock, but it’s been low for a long time. It may climb up at any moment.
A: So, I’ll buy it and wait for it to go up.
B: And cash in your stock when it reaches a point that is high enough to give you a profit. My basic principle is to buy at the bottom and sell at the peak.
A: I see. I’ll buy low and sell high. But what if XYZ plunges again after I buy it?
B: You have to take changes. There’s always risk in the stock market. |