297- Quick Question: Is Cash Okay?
When a company makes the decision to go public, shares of that company become available for purchase, allowing anyone to buy a stake in the company.\nEach share is a stock, and investors are able to buy and sell shares in any public company at any time. Of course, as with any form of business, the goal is to buy a company\u2019s stock when it\u2019s \u201con sale\u201d or undervalued relative to its actual value, and to sell that stock when it\u2019s fully valued in order to make a profit.\nA simplified look at a successful investment is one where an investor buys a company for a certain amount of dollars, holds on to the company for an extended period of time until its value has grown to the point that they feel comfortable selling it, and then sells it above what they purchased it for.\xa0\nBuying great companies when they are on sale is what Rule #1 investing is all about, but it\u2019s fine to wait to buy until you are sure you are getting both a wonderful business and a great price.\nThink of it this way: you would never buy 100% of a company without thorough due diligence, and, likewise, you shouldn\u2019t buy a small percentage of a company without the same.\nWhen the experts\u2014such as Warren Buffett or Charlie Munger\u2014are publicly stating that they are sitting in cash, this is an indicator that they are waiting for a dip in the market, or an event to trigger their next large purchase.\xa0\nOn this vault episode of InvestED, Phil and Danielle answer a listener\u2019s question regarding sitting on cash and managing your investments.\nLearn how to invest and make decisions with confidence with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/2KthciL\nLearn more about your ad choices. Visit megaphone.fm/adchoices