If you follow our social media pages, you would have seen a recent post about the “Buy Low, Sell High” mindset. This way of thinking is known by most, but applied by very few. The barrier? Fear. Those few who conquered their fear and adopted this mentality are the same who succeeded. This article will tackle the illusion that is fear in hopes you will embrace this mindset and achieve Financial Freedom!
“Buy Low, Sell High”?
Likely the most renowned way of thinking in the stock market, the Buy Low, Sell High mindset is essentially the buying of stocks when they are at a low price (when the market declines) and the selling of stocks when they are at a high price (when the market grows). As obvious, and as simple as it sounds, people struggle to follow this mindset because of emotional and psychological barriers.
What is FEAR, really?
It is important to understand that our brains will always, always, be on survival mode. It wants to keep us safe and in our comfort zones. To protect us from exaggerated or nonexistent threats, the brain instills the emotion of fear or anxiety which overcomes all logic. In essence, fear is a survival mechanism. An illusion which prevents many from success. That is, until we become aware of this and take control of it.
When the stock market declines, fear, anxiety and panic kick in full gear because we are, momentarily, losing money… as a response, we sell, low. Then after noticing that the market has improved, we decide to invest again, but at that moment we would have bought high. But I want you to look below:
The graph above shows the performance of the 5 biggest countries’ stock markets over the last 10 years:
- USA (dark blue (green %))
- China (orange)
- Japan (purple)
- Germany (pink)
- UK (light blue)
Since Wealth Heights recommends investing in the US stock market, we will observe it’s performance. As illustrated through the graph, the US stock market (dark blue & green %) has constantly been growing, even after its drastic crashes. The general, long-term trend is upwards and when it declines or crashes, it revives. This tells us that it is not the declining market that makes us lose money, it is the very actions we take in attempt to protect ourselves that makes us lose money. Quite ironic, isn’t it?
“Be Fearful When Others Are Greedy, Be Greedy When Others Are Fearful”
Now you have overcome the hardest part of learning how to control your brain’s survival mechanism; awareness. Next is to take action and implement the Buy Low, Sell High mindset. From here on out, track your thoughts when the market starts declining, and remember the quote by the greatest investor, Warren Buffet, written above.
Want to conquer your fears? Wealth Heights has developed a course from 20+ years of hands on experience in the stock market and endured it’s crashes. This course, book here, will rid of your fears and guide you towards achieving Financial Freedom by providing you with the knowledge and skills to do so!
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READY TO GET YOUR BRAIN OUT OF SURVIVAL MODE AND ACHIEVE FINANCIAL FREEDOM?