Answers about Casinos
The stock market has gone virtually nowhere for 10 years, they complain. While the market occasionally dives and may even perform poorly for extended periods of time, the history of the markets tells a different story. My Uncle Joe lost a fortune in the market, they point out. Many people will find that hard to believe. Compare historical P/E ratios with current ratios to get some idea of what’s excessive, but keep in mind that the market will support higher P/E ratios when interest rates are low.
1) Consider the P/E ratio of the market as a whole and of your stock in particular. Most of the time, you can ignore the market and just focus on buying good companies at reasonable prices. But when stock prices get too far ahead of earnings, there’s usually a drop in store. 3) Do your homework. Study the balance sheet and annual report of the company that’s caught your interest. Nearly every company has an occasional setback. Read the latest news stories on the company and make sure you are clear on why you expect the company’s earnings to grow.
If you don’t understand the story, don’t buy it. At the very least, know how much you’re paying for the company’s earnings, how much debt it has, and what its cash flow picture is like. But, after you’ve bought the stock, continue to monitor the news carefully. Don’t panic over a little bit of negative news from time to time. 4) Be patient. Predicting the direction of the market or of an individual issue over the long term is considerably easier that predicting what it will do tomorrow, next week or next month.
Day traders and very short term market traders seldom succeed for long. If your company is under priced and growing its earnings, the market will take notice eventually. Individual investors have a huge advantage over mutual fund managers and institutional investors, in that they can invest in small and even MicroCap companies the big kahunas couldn’t touch without violating SEC or corporate rules.
If investors can earn 8% to 12% in a money market fund, they’re less likely to take the risk of investing in the market. 2) When inflation and interest rates are soaring, the market is often due for a drop…be alert. High interest rates force companies that depend on borrowing to spend more of their cash to grow revenues. At the same time, money markets and bonds start paying out more attractive rates. As a result, they invest in bonds (which can be much riskier than they presume, with far little chance for outsize rewards) or they stay in cash.
If you have any sort of concerns relating to where and the best ways to utilize discuss, you could call us at our site. The results for their bottom lines are often disastrous. Here’s why they’re wrong: Or, they’ll bail out of stocks at the worst possible time by insisting that this time, the end of the world is really at hand. They will justify outrageous P/E’s by talking about a new paradigm. 5) Take advantage of periodic panics to load up on shares you really like long term. It isn’t easy to do, but following this advice will vastly improve your bottom line.