Tag: Buy low

Beware the price you pay…or pay the price.

“The price you pay determines your future returns” is an old adage in financial literature. This is a simple way of saying that when you buy at high prices, your future returns are lower. Conversely, when you buy at low prices, your future returns are higher. Buy low, sell high. It all sounds right, but is it true? Or is this phrase just an antiquated relic of times past when money did not grow on government balance sheets, and asset prices didn’t always go up? That is a fair question, but it is not a simple one.

The Problem of Pain

Occasionally, it’s important to review our investment philosophy. We do this in our newsletter as well as posts to this blog, and we do it for both our current clients and those who are looking for a different approach to investment management.

Use Butter, Not Margin

Regardless of where you land on this most-important issue, the benefits and drawbacks of margarine is not the focus of this blog post. Rather, I wish to discuss the benefits and drawbacks of margin, with an emphasis on the much more dangerous drawbacks. As my mama always said (or should have, anyway) “use butter, not margin”.