You can buy stocks cheaper when there is very little demand for them, and you should arrange your affairs so as to be prepared to buy at such times. FOOTNOTES: [1] In our advisory Letter of April 25, 1922, we advised our clients to refrain from margin buying for a while, because the market was advancing too rapidly. Shortly after that there was a decided reaction in the market. CHAPTER VIII. WHEN NOT TO BUY STOCKS There are times when stocks should not be bought, and that is when nearly all stocks have advanced beyond their real values. It is doubtful if there ever is a time when all stocks have advanced beyond their real values, but when the great majority of stocks have so advanced, there is likely to be a general decline in all stock prices. The stocks that are not selling too high will decline some in sympathy with the others. Therefore, there are times when we advise our clients not to buy any stocks. Some organizations giving advice in regard to the buying of stocks, advise their clients to refrain entirely from buying for periods of a year or longer, but we think it is seldom advisable to refrain entirely from buying for any great length of time. There usually are some good opportunities if you watch carefully for them. It is our business to watch for these opportunities and tell our clients about them. There are also times when the technical condition of the market is such that we advise our clients to refrain from buying for a while. See Chapter XIV. CHAPTER IX. WHEN TO SELL STOCKS You should sell stocks when the market price is too high. That is a general rule, but it is necessary for you to study all the influences affecting stock prices to be able to decide more accurately when you should sell your stocks. We give you, in future chapters, much more information on judging the markets. Another general rule, is to sell stocks when nearly everybody is buying them. It is a well known fact that the great majority of people buy stocks near the top and sell near the bottom. Naturally when everybody is optimistic, stocks will sell up high, but sooner or later they will come down again, and when everything looks very promising is a good time to sell. It is better to lose a little of the profit that you might have made by holding on longer than not to be on the safe side. The man who tries to sell at the top nearly always loses, because stocks seldom sell as high as it is predicted they will, or, in other words, the prediction of higher prices is advanced more rapidly than the prices.