Tracking the Best Time to Buy

摘要

As an investor, it's easy to get caught up in the moment. Turn on CNBC, and the latest stock quotes streak across the bottom of your TV screen. Fire up your PC, and presto, you've got 24/7 access to every hiccup in the financial markets. A steady stream of prices can look like random data points―until you step back and take a longer view. You can get that perspective by turning those data into moving averages, which track the average price of a stock or an index over various periods of time. Such measurements smooth out short-term price fluctuations, allowing you to discern trends that develop over weeks, months, or even years. These uptrends and downtrends can persist for a long while. Bill O'Neil, author of several books on stock investing and chairman of Investor's Business Daily, the national business newspaper, says that in studying the price patterns of thousands of stocks dating back 50 years, he found that once a stock became a market leader, it tended to remain in a strong uptrend for 18 months to two years. Downtrends can be equally persistent.