What is buy low, sell high? Why timing the market rarely works
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If you’re interested in investing, you may have heard the phrase “buy low, sell high” and wondered if it’s an approach you should take. It sounds simple. But in practice, especially with real money on the line, it can get complicated quickly.
We checked in with a few experts to find out what it means, why it’s harder than it looks, and how young investors (and their families) can build their investment knowledge without falling into common traps.
What does buy low, sell high mean?
Buying low and selling high means buying an investment when it’s cheaper and selling it when the price goes up in order to make a profit. Sounds easy enough, right?
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The challenge is that prices don’t just rise and fall in a neat pattern. They move constantly, sometimes based on company earnings, global events like tariffs, or shifts in market volatility. And sometimes just based on how people feel.
Neven Valev, Head of Research at The Global Economy Project, explains it like this. “Prices of financial assets—stocks, bonds, ETFs, mutual funds—fluctuate over time. Sometimes investors become very optimistic; they buy assets, and prices rise," he says. "Then something cools their enthusiasm, they sell and push prices down. If one can identify these turning points and buy when others are selling and sell when others are buying, then one could make a profit. But, in practical terms, that is not possible.”
Visualize it: Show kids how the market works
Knowledge is power! Introduce investing basics with financial literacy games like LevelUp™, where kids can practice with mini challenges.
The emotional side of buy low, sell high
One of the biggest reasons this strategy is hard to follow is emotion.
“I often use the phrase 'money is math' when trying to help people separate their emotions from financial decisions," says Frances Rahaim, Ph.D., president of HUG Your Money, Inc. "For most, money isn’t just math—financial decisions are emotionally charged. When markets drop, fear takes over. When prices soar, we don’t want to miss out. So even though we know the right move, our instincts scream the opposite.”
Even seasoned investors can panic, second-guess themselves, or act on gut feelings. And that can lead to costly mistakes.
Dr. Rahaim shared with us a few examples of how emotion can get in the way:
Fear of missing out (FOMO). “Everyone else is getting rich—I have to jump in now!” Usually, by the time the general public hears about a “hot tip," it's too late.
Panic selling. “It’s falling! I need to get out before I lose everything.” Have an exit strategy before you enter, and stick to it.
Overconfidence after a win. “It worked last time, so I’ll double down now.” Think of three fruits on a slot machine.
“These instincts are normal—but they can wreck a long-term plan," says Dr. Rahaim.
Learn by doing: Practice together with parent-approved tools
Teach kids to guard against emotional spending and make smart choices. Get hands-on, parent-approved experience with tools like Greenlight, the #1 family finance and safety app. Kids can research and propose stocks to invest in, starting at $1—you approve every trade.
Can you time the market?
Market timing means trying to guess the perfect moment to buy or sell. But the truth is that no one, not even the experts, can do this consistently. “One cannot time the market. There are too many factors moving markets, many of them not exactly rational, and their net effect cannot be predicted,” says Valev.
Sometimes chasing the latest headline or market trend can feel like running in circles. One minute you’re holding out for the perfect moment, then suddenly, it’s passed you by. Kind of like waiting for the right price to buy concert tickets, only to find they’re sold out or the price has doubled. That’s why some families lean toward simpler investment strategies that help them think more long-term, instead of getting caught up in the moment.
An approach that doesn’t rely on perfect timing
Trying to be the smartest investor in the room usually backfires. Instead, you can focus on being the most consistent. One approach some investors use is investing in ETFs. These are funds that include many companies and spread out your risk. Learn more about mitigating financial risk and smart family finance at the Greenlight Learning Center.
Valev explains why this can be a more reliable strategy: “What is more certain, however, is that over longer periods, companies across industries and geographies grow and earn more money. One can invest in that steady growth by buying shares in widely diversified ETFs. These funds invest in many diverse companies without picking winners and losers, and are therefore also low-cost. A regular monthly investment in such ETFs goes a long way toward building financial security.”
Buying low and selling high sounds ideal, but real-life investing isn’t about perfect timing; it’s about long-term thinking and learning not to let your emotions take over. Of course, investing looks different for everyone, and there’s no one-size-fits-all strategy.
Rahaim encourages families to: “Pick a simple plan you can stick with—and don’t let headlines, hype, or hot tips knock you off track. Start small, stay steady, and remember: You’re not just investing money. You’re investing time, patience, and belief in your future.”
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