Stock Market High and Low for beginners

The stock market has seen its share of high and low and that alone cause the money to be made by millions of investors. There are various theories and charts people use to buy and sell at prices which can be deemed as high by someone and low by someone else based on what their prediction is of the future.

Some investors use the fundamental analysis to analyze a particular stock and some use the technical analysis to write about a stock and then there are various folks who just go by their gut feel about the stock market high and make a decision based on that. Just to give you an example the stock market was at an all time high and when I say the stock market then by that I mean the Dow Jones Industrial Average or simple Dow the stock market high was in Oct of 2007 when it reached the high of 14000 something.

Some folks thinking that there is money to be made would have bought the stocks at point in time and some would have sold at that point in time thinking that the market was at an all time high. That is the whole dilemma of the normal investing crowd and that is that they want to time the market which is usually not the case and you can never time the market .

In fact those who bought the stocks at a market high would have gained some money for a while but since after that the market crashed and now in 2008 the market has fallen back to it spre rally levels those folks who sold the stocks at that level would now be waiting for the right time to enter the market as that is opportune time plus they are sitting on a pile of cash when they sold the stocks at the peak of the market.

For example going by the inflation adjusted numbers the all time low of Dow Jones was 28.48 in 1896. Well that may not be a good indicator but yes there is nothing to suggest that market lows cannot be there. As a stock market for beginners lesson the important thing to note is that you should keep changing your strategy and look for returns wherever possible and if you do not have the time and the money to invest in stocks then you should actually try use the theory of averaging and put your money in two things and those are mutual funds of good firms and or the money in safe things money market mutual funds or CD’s

But beware in todays gloomy scenario where banks are actually at the receiving edge of a lot of massive outflows you also need to tread cautiously. In gist the stock market high or stock market low is just a psychological thing and it really depends on what kind of stock market investing would you do.

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