Buy low and sell high; it’s the ultimate investing tip, although never easy to execute. That’s why it’s so important to control the risk that comes with investing. One way is by having an exit strategy in place whenever you take a position on a stock, bond or any other investment. That is, establish pragmatic predefined selling points — for both a profit and a loss — that take emotion out of the equation.
The bottom line: There’s no guarantee an investment will be bought at the optimal price — but if we’re smart, we can always control how much we ultimately lose.
Photo Credit: Katrina Tuliao
(This article was originally published on May 12, 2012)