7 Stock Market Adages Explained and Illustrated

Some see a share that is quickly falling in value as a buying opportunity. Others see it as a warning sign.

A falling share price causes doubts. Will you sell immediately at a limited loss? Or will you take a risk and wait for a possible turnaround?

Buying a share at rock bottom and selling it again at its highest point: for some investors, it's the ultimate dream.

Central banks have always played a major role in overall stock market sentiment. However, since the financial crisis of 2008, the US Federal Reserve, has become more influential on the stock market than ever.

Some nuggets of wisdom around investing sound a bit risky. Buy the rumour, sell the news is one such example. It makes us think of a clever trick to get ahead of other investors.

What investor doesn't dream of strong profits? However, getting too greedy often leads to tricky situations. The stock market adage "Pigs get fed, hogs get slaughtered" is a warning against precisely that.

Some stock market wisdom sounds almost too simple. Yet this simplicity is often backed by years and years of stock exchange logic. "The trend is your friend" is a perfect example of this.