Stick with the winners

It is quite a common mindset to look at the share price of a stock and be put off from buying it because it has done well in the past. You might think that you are too late and have missed the boat. Some investors look for alternatives in the same sector that may not have done as well, and buy those instead. For example, buying AMD shares instead of Nvidia.

I think that's a mistake. A company's share price often gathers momentum because the underlying business is doing very well. The market is no fool. Every time you buy a share, you are making an investment decision about the future, not the past. You have to ask yourself the question, is the price I am paying today a fair reflection of this business and is there further upside from here?

Winners are winners for a reason. Laggards are laggards for a reason.

If you feel the future is bright and the price you are paying is fair, then buy the share and forget about it for a while. Better late than never when buying into a quality company.