Tuesday, March 6, 2012

Why I like being a contrarian

   When buying and selling stocks, I believe going against the majority has some large benefits. Everyone should develop their own investment style. Contrarian investment strategy is just one of those styles. My style is about half contrarian. The number one rule of investing is to buy low and sell high. When faced with a stock that most investors don't like, the price is usually low. When everyone likes a stock its share price gets bid up. I'm not suggesting the majority is always wrong. We should look at each company individually to determine if the majority might be wrong. Contrarian investing doesn't make that determination. We need to do our own research to make a buy or sell decision. Contrarians are simply researching possible purchases when they are lower, and looking for stocks to sell when they are higher. I believe this gives contrarians better entry and exit points throughout the investment process. Finwiz.

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