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The Wise Investor


4.5 The buy/sell decision
John rested for a short time, and regained his
breath. He decided to slow down a little, and give
them both time to rest.
Kate had been listening carefully, and although it
was a great deal to absorb, he felt that she had kept
up with his comments.
Many Sunday evenings Kate would write down
the things that her grandfather had told her, and
think about them at her leisure.
This was fortunate, since the discussions were
becoming more practical and detailed. John's main
aim had been to increase her understanding and
widen her horizons, and this had been going well.
There was much practical advice that he still
wanted to give her, though, and he was grateful that
she was writing it down. There was a lot to
remember.
"Now Katie, we come to one of the most
important sections. Again, this is an area were many
people go horribly wrong.
I would venture to say that if people only
mastered this one single section, then most of them
who have lost all their money in investments would
still have it today. I am going to talk about the
decision to buy or sell an investment, and how you
should come to that decision. I use the term 'buy'
loosely here.
You may buy an asset such as a house, or invest
your money in a fixed term deposit. In both cases,
you are putting your money into another form, and
people in the finance industry would refer to it as
'buying a product'.
When I use the term 'buy' in this context, I mean
investing your money. The term 'sell' is used for
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