Why Men Need Body-Stockings
1. You can tell if a Stock is cheap or expensive by the Price to Earnings Ratio.
False: PE ratios are easy to calculate, that is why they are listed in newspapers etc. But you cannot compare PE’s on companies from different industries, as the variables those companies and industries have are different. Even comparing within an industry, PE’s don’t tell you about many financial fundamentals and nothing about a stock’s value.
2. To make Money in the Stock Market, you must assume High Risks.
False: Tips to Lower your Risk:
· Do not put more than 10% of your money into any one stock
· Do not own more than 2-3 stocks in any industry
· Buy your stocks over time, not all at once
· Buy stocks with consistent and predictable earnings growth
· Buy stocks with growth rates greater than the total of inflation and interest rates
· Use stop-loss orders to limit your risk
3. Buy Stocks on the Way Down and Sell on the Way Up.
False: People believe that a falling stock is cheap and a rising stock is too expensive. But on the way down, you have no idea how much further it may fall. If a stock is rising, especially if it has broken previous highs, there are no unhappy owners who want to dump it. If the stock is fairly valued, it should continue to rise.
4. You can Hedge Inflation with Stocks.
False: When interest rates rise, people start to pull money out of the market and into bonds, so that pushes prices down. Plus the cost of business goes up, so corporate earnings go down, along with the stock prices.
5. Young People can afford to take High Risk.
False: The only thing true about this is that young people have time on their side if they lose all their money. But young people have little disposable income to risk losing. If they follow the tips above, they can make money over many years. Young people have the time to be patient.
Cory operates an educational website to help people discover their options to becoming financially free. To learn more checkout: http://www.choose-to-be-rich.com
Related Articles:
The Capital Asset Pricing Model of Stock Investing (CAPM) - In 1990 Harry Markowitz, Merton Miller, and William Sharpe shared the first Nobel Prize in the very young area of financial economics. The Nobel committee recognized Harry Markowitz for developing portofolio theory, Miller for the theory of corporate finance, and Sharpe for the Capital Asset (stock market) Pricing ...
What Is One Of The Worst Stock Market Investments You Can Make? - Investing in the stock market is probably one of the riskiest ventures you can delve into with your money you really need to know how to trade stock. It is also one of the most profitable undertakings you may make at the same time. So it’s only normal that you may have reservations about actually tryin ...
How To Profit From A Stock You Don't Even Own - Investing in the stock market is probably one of the riskiest ventures you can delve into with your money you really need to know how to trade stock. It is also one of the most profitable undertakings you may make at the same time. So it’s only normal that you may have reservations about actually tryin ...
How To Become A Successful Stock Investor -
The key to becoming a successful stock investor is to know the difference between a great investment and a bad investment. Many investors assume that great companies are great investments, but this is not always an accurate assessment. Sometimes, a wonderful business can make a lousy investment. Most st ...
Cash Strapped Garage Start-Ups May Wish to Use Stock Options - How can a super small garage type start-up company with just a good idea and some brains launch put together a team of seasoned entrepreneurial know how to launch a new product. Well one idea is stock options. Recently I was asked to assist a small entrepreneur with a project, which would eventually turn into a ne ...
8 Tried and True Commodity Stock Trading Application Rules That Will Explode Your - How can a super small garage type start-up company with just a good idea and some brains launch put together a team of seasoned entrepreneurial know how to launch a new product. Well one idea is stock options. Recently I was asked to assist a small entrepreneur with a project, which would eventually turn into a ne ...
Stock Picking Tips -- Six Months in Advance - Consider for a moment what the greatest investor in history has averaged for decades. Warren Buffet has averaged around 20%. This 20% has made him the greatest of all time. A fund manager, Peter Lynch, has also averaged a number around 20%. About 75% of all fund managers can not beat the market which can be tied b ...
For a Complete list of Articles with summaries Click Here
© Copyright. All rights Reserved. QualityBooks.com | Sitemap