Investors like to see the value of their stock appreciate, sure you have made some paper money.
However many of us are still in the accumulation phase of our lives. we are net buyers of stocks. so when stocks appreciate sure our holdings go increase in value. however future investments will be more expensive therefore ultimately less profitable.
As an Investor, the best thing that can happen to you is to have low stock prices during your accumulation phase and high stock prices during your exit phase.
What you do not want is surging stock prices during your accumulation phase ending with a crash during your exit phase.
That what makes us bears in bulls clothing. we invest like bulls, by taking long positions in dividend stocks. yet at the same time your hoping the stock will not increase because your still not done buying. often when one of my holdings appreciates I'm unhappy because now can't lower my cost basis, and buying more will increase my average price.
Wednesday, May 12, 2010
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