What is Contrarian Investing?

When the stock market starts going up, most people are, initially, scared to step aboard. It's not until stocks have gone up a long way for a long time that most investors become interested and start buying. On the other hand, when stocks start dropping, most investors are not afraid. Their courage has been bolstered by the steadily rising tide. Only because the market has risen a long way, investors believe it will keep going up. It is almost a gold-rush mentality.

Contrarian Investors buy on bad news, and sell on good news. "Buy low, sell high" is a well-worn clich? But it's well-worn for a good reason:

That's how an investor must think in order to make money.

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