It's the same reason I save my money: for opportunities when prices are low. This is especially relevant now that the stock market is tanking. Most people with any kind of money think this way.
> It's the same reason I save my money: for opportunities when prices are low The problem is: how do you know if the time is right (i.e. ten years later you can say "I invested in the lowest possible price")? Possibility A: you invest too early, stock drops further and you can't recover in a reasonably long time frame (e.g. 1 year) Possibility B: you invest too late, and people who invested before you made more profi…
Who cares if the investment doesn't maximize potential profit? If someone invests $50 and gets $100 in return, that's great. If someone else invests $50 and gets $99.42 in return, that's great too, and who cares if someone made more 'profit' from buying and holding an imaginary financial instrument? The point is: buy "lower", sell "higher" is close enough to buy at the lowest point and sell at the highest point. But other factors come into play on why someone would sell at any time. Theoretically, ceteris paribus mutatis mutandis, if you invest in some company that happens to survive a thousand years into the future and has an annual average ROR of 7%, you should never sell it, even after your death if you want to maximize profit...buy low-ish, sell high-ish as convenient and with common sense. Theoretical perfectly maximized trades should not be the concern of the investor. Count dollars instead of pennies.
The problem you refer to is formally known as "Risk" aka Risk Capital.