In many things in life ‘timing is everything.’ This is so important in making investment decisions that timing can be the subject of an entire course in business school.  One of the most common things that we hear in investing is that one must always “buy low and sell high.” Yes, of course, but this just begs the question, how do you know when it is ‘high’ or “low’? This is the perennial question that if anyone knew the answer to then life would be a much simpler endeavor.

One way to know if the time has come to buy a certain item is to “know the price!” Just like cereal, tomatoes, canned fruit and napkins all have a price, so to do stocks. And just like a smart homemaker knows when something is a bargain and she stocks up when the price goes down, so to a savvy investor. Also knowing the cost of the raw ingredients can help a shopper know if an item is overpriced, so to a smart investor knows about the company, how it’s doing, how many products they sell, how many clients they have, how much debt are they in, and more. This intrinsic value of a company, combined with what you feel is the company’s growth potential; help an investor assess the value of a stock.