Buy and Sell

What do 'buy' and 'sell' mean?

Investors buy something when they exchange cash for an asset. They sell something when they give it to someone else for cash. In investing, this is known as liquidating someone's assets in other words, turning a 'solid' asset into 'liquid' cash.

Where have you heard about buying and selling?

Buying and selling are the heartbeat of an investor's life, and timing both these actions correctly is a constant preoccupation. Whether in investment guides or the financial media, talk of buying and selling opportunities is incessant.

What you need to know about selling...

There are many reasons investors may wish to buy or sell an asset. Buying is usually linked to a view that an asset is under-valued and has the potential to rise, selling by the belief that it has reached its highest value and is in danger of falling.

Buying and selling are at the centre of trading strategies that involve 'going long' (buying) on one asset while 'shorting' (selling) another.

Investors can also sell an asset in order to cut their losses. They may well do this if the asset is dropping in value and they don't expect it to rise again.