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You are more likely to implement buying low and selling high if you always check the value of something in comparison to historical values, before buying or selling it. Consider the overall trend of an asset class, such as stocks, bonds or real estate, before investing in it, and what that asset class has done over the previous few years. If it has had a big correction, then it makes more sense to buy than to sell, yet so many investors let their emotions be their guide. If an asset class has gone straight up for several years, it may be best to either ease into it, or reduce the amount for that asset class until a more opportune time.
This seems so intuitive, yet it causes more performance problems for investors. Our money is the only area where we sometimes forget to check the ticket price. Buying undervalued investments is like buying a new suit on sale. It is the same suit, but it is on the clearance rack; this is so much easier with clothes than our investments because of our emotions around money!
In the same way, markets move to the clearance rack every few years due to normal changes in the economic cycle. Not only this, but you know that summer suits are going to go on sale in August and winter suits will go on sale in January, just like you know that stocks will go down again, as will bonds, and real estate, but with less predictability and frequency than the clothes at your favorite store. You know the change in seasons and subsequent sale is coming, just like the change in the value of asset classes. A financial woman shops the clearance rack when it gets loaded with investment merchandise.