Explanation of Buy the Index, Do Not Trade, and Never Sell

[Explanation of buying the index, not trading, and never selling.] CLEC Investment Channel. Post date: May 16, 2020

Our meaning of buying the index, not trading, and never selling is as follows:

1. Buying the index means the target we choose will never have a problem. So we can never sell. We can buy at any time, and buy whenever we have money.

2. Hold index funds forever and never sell, except when you need money; then sell only the amount you need.

3. Not trading means not thinking the market has risen too much and wanting to sell high, wait for a low point, and buy back. Do not try to sell high and buy low, or buy low and sell high, to earn the spread. Also, do not panic-sell because the market falls sharply. In other words, buy and never sell. No matter what the market does, do not sell, and do not try to earn a price difference.

4. Whenever you have money, buy. Do not guess, and do not wait to see whether the market will fall before buying. If you have money, buy. You can buy in batches, but you must not think the market will fall further or guess whether the market will correct and wait. In other words, do not time the market.

In summary, you can buy regularly in batches. If there is a decline, you can buy more until all the money you want to invest has been invested.

After buying, do not sell. Of course, not selling means not trading. Do not try to sell high and buy low, or buy low and sell high, and do not sell to leave the market because you worry about downside risk.

Market risks will all pass. Do not sell and leave the market to avoid risk or bubbles. Believe that the index will eventually rise back. The declines of 35%-60% in 2000, 2008, and 2020 all eventually recovered and reached new highs.

So buying the index and never selling is the right way.

I hope everyone can understand. This is what I believe is the best way to make money in the market.

If you have questions, we can discuss.

James