Contrarian Investing

Contrarian Investing By Stock Advisor Group's Editorial Team www.stockadvisorgroup.com When the stock market starts going up, most people are, initially, scared to step aboard. It's not until stocks have gone up a long way for a long time that most investors become interested and start buying. On the other hand, when stocks start dropping, most investors are not afraid. Their courage has been strengthening by the steadily rising price. Only because the market has risen a long way, investors believe it will keep going up. It is almost a gold-rush mentality. Contrarian Investors buy on bad news, and sell on good news. "Buy low, sell high", That's how an investor must think in order to make money. Contrarian investing is not new. In fact, it has a long history. But a review of the most recent articles on contrarian investing show that there has been a gap. Because contrarian investing can be a difficult strategy to follow, and requires commitment and discipline to make it work. The Contrarian Thinking: A contrarian investor evaluates the opinion of the investing public, and when that opinion gets an unreasonable extreme, invests against it. Why we can profit from contrary opinion: The basic concept is that if a most traders are bullish, it means that most market participants who believe prices are going higher are already long, and therefore the path of least resis