Amidst the peak of the Covid market selloff (arguably panic) it is hard to imagine that just six months later that so many individual stocks would be trading either at or near their all time highs.

So should YOU buy a stock when it is making new all time highs?

The answer is not so black and white. Taking things a step back, I grew up in Omaha, where my grandfather founded an All-American ‘ma and pa’ business back in 1955. Among many of his great slogans (anyone who knew him will tell you that he had many) was “buy low and sell high.” A simple enough concept that not only can be applied to used cars, but to stocks as well. The idea of purchasing shares of a company when it is trading at a discount but has fundamentals that may justify a higher price in the future is known as value investing. Value investing was made world famous by another Omaha native — Warren Buffett.

While purchasing stocks at a discount is one possibly successful path to investing, there are also those who prefer to buy equities that are widely popular. After all, it is not unreasonable to think a stock that makes new all time highs will likely continue to do so. I call this momentum style of investing “buy high and sell higher.”

Rather than trying to determine whether value investing or momentum trading is better for you (they both have their pros and cons). The main concept that one should grasp is that perhaps the most suitable means to accumulate shares is by way of dollar cost averaging. By purchasing a fixed dollar amount of shares in a company periodically over time it prevents the investor from purchasing too many shares when the price is “high”, but also allows them to scoop up more shares when the price is “low.”