Always carefully weigh factors before making an investing decision.
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Holding on during rough times represents a true test for the long-term investor. However, due diligence is always recommended. A company or industry might not pull through. Ultimately it is your decision on whether or not to keep shares in a company.
A number of financial articles can be geared for entertainment, especially if they are about politicians. While entertainment is nice, always focus and do your own research.
Don’t rely on one single metric such as the P/E ratio. Use a complete analysis to get an overall picture of your investment.
Developing an investment philosophy that works enhances your chances of successful investing over the long-term.
Remember when looking at earnings headlines to dig deeper, think for yourself and make your own decisions.
Finding good quality publicly traded businesses to own over the long-term allows you to sleep better than utilizing trading strategies that could turn on you in a dime.
Once upon a time if you wanted to get a risk free return on your investment, you put cash in a savings account. If you wanted a superior return, you risked at least part of your cash in the stock, bond, and/or commodities market for a shot at superior returns.
Now, in this low to negative interest rate environment, you get almost no risk free return or even have to PAY to keep your savings safe. Increasingly, you need to risk at least part of your cash just for the potential of a return at all. Record low interest rates translate into stock bubbles as investors seek a decent return on their investment. This means that some companies will trade at excessive valuations even though fundamentals may be stagnant or eroding. Do your research before investing and make sure that valuations aren’t too excessive. Also, it may pay to keep some cash on hand to invest during any potential corrections.
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William Bias has been researching stocks since 1992 and has been a freelance writer since 2012. He employs a strategic business oriented approach to stock market investing. Archives
September 2016
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