The Absolute Best Time to Buy/Sell

When everyone talks about and recklessly buys the same class of asset, it is signs of bubbling and the peak of the asset price. For instance, housing was a super hot topic few years ago. All medias; newspapers, magazines, TVs, had uncountable coverage on it. You might be also aware that people in different age groups discussed about housing in parks, restaurants, and supermarkets. I heard about two people physically fighting for the right to buy a $500K+ house in Glendale, CA. It sounded crazy!!! The history proved that was the best time to sell if you owned one for investment, or not the right time to buy. History repeated itself as the phenomenon of the housing bubble was identical to the internet stock bubble in 2000.

On the other hand, when everyone is afraid of touching a class of asset, it is a sign of the asset price’s nadir. In March 2009, the stock market fear index, VOLATILITY S&P 500 (^VIX), stayed at a historic height and stock mutual funds had experienced a substantial amount of net outflow for several months. It implied that people were desperate to sell at any price. The history proved that was the best time to buy, or not the right time to sell. History repeated itself as Hong Kong’s billionaire, Ka-Shing Li, started buying properties to build his fortune in 60’s when Hong Kong was in riot and the future was in doubt.

Pay attention on what people and media talk about. If it seems too extreme and irrational, do the opposite of what they do. It may also go against your inner mind, but it will save you huge amount of money or make you handsome return if you can take this psychological discipline. Remember, history had happened and will repeat itself. This strategy always works!!! Be prepared not to make a costly mistake.