Investing

Buying stocks at 52 week highs

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  • Feb 9th, 2013 9:26 am
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Deal Fanatic
Jul 23, 2007
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Just because a market is high, doesn't mean it can't go higher. If the market does indeed goes down, nobody's going to ring a bell when it hits bottom so that you can dutifully put in your buy order. In fact, if it goes down too much, you may be too petrified to make your purchase. Just buy into it and be done with it. Invest in a diversified portfolio according to your risk factor, re-balance each year, and forget about the market timing.
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Apr 30, 2012
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Stryker wrote: Just because a market is high, doesn't mean it can't go higher.
That is your point of view. I like to be prudent and sell a little bit when it goes that high.
Stryker wrote: Just buy into it and be done with it. Invest in a diversified portfolio according to your risk factor, re-balance each year, and forget about the market timing.
Your approach is buy & hold, which is a good strategy for long-term investment. I like to buy low & sell high and it isn't really market timing, it's rather lowering average unit cost since I never buy/sell massively.
Deal Fanatic
Jul 23, 2007
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bgallagher wrote: That is your point of view. I like to be prudent and sell a little bit when it goes that high.



Your approach is buy & hold, which is a good strategy for long-term investment. I like to buy low & sell high and it isn't really market timing, it's rather lowering average unit cost since I never buy/sell massively.
That's why I mentioned above "re-balance each year". To re-balance a portfolio is much like value investing. You're selling part of an asset class that has gone up the most, in order to redistribute the proceeds into the classes that haven't done as well and are down, so that your portfolio is now back to it's original target asset values, percentage wise. Any new money from savings and distributions goes into the poorest performing asset classes.
Jr. Member
May 14, 2007
134 posts
6 upvotes
I'm a long-term investor but I don't see a reason to buy into the highs. I do need to learn to be disciplined about buying the dips though as I often justify not buying by thinking "Well, it might go even lower and I'll get an even better price!". I've been doing that with INTC since it hit ~19.00 recently and it has not gone close to it since, leaving me with 0 shares and a lesson.
Member
Sep 24, 2012
358 posts
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Toronto
Wallstreet is fearful of the '14000' Dow. News anchors and analysts seem so anyway. So they are beginning to be very bearish in their analysis trying to scare or tame the market.

Insider sells or instituional sells are expected. insider sells on their own mean nothing. An executive looking to buy a porsche for their son will probably unload a couple 100K worth of shares. Many are however locking in profits which is normal and expected. Institutional investors will billions of dollars in shares dont unload all their shares in one day. They do it over time. This is normal.

I dont think the market will be bearish anyway. I think the market should be bullish for at least another two quarters.

Indexes are changing over time and adjusted and re-weighted. Thats why the dow only ever increases historically. Its a ridiculous thing to begin wtih anyway, but ok. The reason why the market never really shot far past 14000 before was due to unrelated economic events that has nothing to do with normal economic cycles. The last recession in 2009 was brought on by the downfall of mortgage back securities and the chain of events that followed. It wasnt neccesarily an economic cycle in the traditional sense (cause on by inflation etc) but more so than a mere breakdown of a bubble which lead to a premature recession.

The next recession will come eventually but I dont think any time too imminent. It will likely be due to the huge national debt collapsing down south along with some issues in europe and possibly bubbles in asia causing strong market fall. That is probably going to be the case. But since they raised the ceiling and keep on printing money, it should be happy party for another year before issues arrise. 14000 on the dow is just an arbitrary number. It means nothing.
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Jun 19, 2009
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coachpotatoarmchairQB wrote: Would it be silly if you didnt buy on 52 week high and then it went even higher?

How many people cried when they didnt buy more netflix after it jumped so much, and then rose more afterwards? Cause it jumped so much already right?
That's essentially the argument at hand.
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Dec 26, 2010
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SkimGuy wrote: That's essentially the argument at hand.
Just buy it. It's a long journey. The reality is that there are a ton of 52 week highs in a bull run. And the reality is that too many people sit on the side line playing the "I wonder" game and miss out. I have a friend who is sitting on money because he's waiting for the market to "get back to normal". He's missed out on a lot of money. Despite how pessimistic the news has been in 2012, the markets have done great.

Just get to it. You don't have to waste so much time on this.
Banned
Feb 17, 2007
3190 posts
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wm009 wrote: Just buy it. It's a long journey. The reality is that there are a ton of 52 week highs in a bull run. And the reality is that too many people sit on the side line playing the "I wonder" game and miss out. I have a friend who is sitting on money because he's waiting for the market to "get back to normal". He's missed out on a lot of money. Despite how pessimistic the news has been in 2012, the markets have done great.

Just get to it. You don't have to waste so much time on this.
According to John Bogle and Warren Buffett, the market should yield 7% annualized return over an extended period of time (20 years or so).
So, hitting 52 week high is not an issue over the long run.

They have this saying on Wall Street, retail investors are dumb money.
This is what Warren Buffett has to say about dumb money: "they are dumb money until they realize they are dumb and invest in index funds, then they become the smartest money". AKA, Buy NYSE:VOO and get it over with.

Keep in mind that the market is fairly valued, but not overvalued. There is still room to go, but do not expect huge gains over the next couple of years until we have a sell off.


Edit: I was just wondering if any of you could find me an index fund that charges 0.05% in MER? if you do find one, please let me know. VOO is the best Buffett can do. If you discover an index fund that charges less than 0.05%, then you actually beat Buffett in something lol.
High fee actively managed mutual funds are bad for your wealth.
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Jun 19, 2009
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coachpotatoarmchairQB wrote: What is the ETF you are looking at?
It's in the OP - VCE
wm009 wrote: Just buy it. It's a long journey. The reality is that there are a ton of 52 week highs in a bull run. And the reality is that too many people sit on the side line playing the "I wonder" game and miss out. I have a friend who is sitting on money because he's waiting for the market to "get back to normal". He's missed out on a lot of money. Despite how pessimistic the news has been in 2012, the markets have done great.

Just get to it. You don't have to waste so much time on this.
That's true. I got too worked up in trying to get a cheaper entry price when in reality I should have just went in. Lol
ACC-Major wrote: According to John Bogle and Warren Buffett, the market should yield 7% annualized return over an extended period of time (20 years or so).
So, hitting 52 week high is not an issue over the long run.

They have this saying on Wall Street, retail investors are dumb money.
This is what Warren Buffett has to say about dumb money: "they are dumb money until they realize they are dumb and invest in index funds, then they become the smartest money". AKA, Buy NYSE:VOO and get it over with.

Keep in mind that the market is fairly valued, but not overvalued. There is still room to go, but do not expect huge gains over the next couple of years until we have a sell off.


Edit: I was just wondering if any of you could find me an index fund that charges 0.05% in MER? if you do find one, please let me know. VOO is the best Buffett can do. If you discover an index fund that charges less than 0.05%, then you actually beat Buffett in something lol.
A year ago I didn't know much about investing (luckily I wasn't invested in anything). After some diligent reading, I discovered the world of ETFs and I thought it was too good to be true. But now that I've done even more reading, I think it's the worst kept secret among casual (i.e average) investors. You don't need someone to manage your money or to do research yourself - You just need to buy the whole index.
coachpotatoarmchairQB wrote: why are index funds good
For many reasons. In summary, it's an efficient, low cost way to get a diversified exposure to equity markets with no guesswork or any research at all, really.

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