Falling Stock Prices And Money Making Opportunities
The simple answer to this question is yes, with a small (but important) caveat: as long as you have the right information to be successful.
It has often been said that the stock market behaves erratically in the short term. With that in mind, you will certainly understand that getting the basics down pat is important for successful trading on the market. The news have certainly not been rosy in recent times, but I like to say that one man's pain is another man's gain.
Just like every other market, there are "sales" in the stock market, and those sales are known as bear markets. Because of different reasons, people want to sell their investments, and that creates a pressure on stock prices, which go down. This is where the opportunities present themselves.
If you're an investor with a hefty chunk of your money in a stock that's tumbling down, that's not necessarily good news for you, but if you've been on the outside looking in, falling stock prices might give you an "in" into great deals, as long as the fundamentals of your planned investment are solid. Thinking outside the box has often led to great fortunes.
Looking past the financial sector, there are plenty of other sectors where company stocks have been battered because of the current crisis but whose business fundamentals are as solid as ever. This is where your research comes into play so you can determine which ones are worth buying.
Back to our previous point about understanding the basics, you will need to look at those companies' financials to determine whether or not the current fall in stock price is caused by the company not doing very well or just caused by widespread pessimism about the economy.
When you find companies whose financial performance is solid, are well-run, and are turning profits near or at their usual levels, you need to buy them even if most people out there are selling them. Doing so gives you a great chance of seeing great returns in the years to come, when the downward spiral comes to an end.
It has often been said that the stock market behaves erratically in the short term. With that in mind, you will certainly understand that getting the basics down pat is important for successful trading on the market. The news have certainly not been rosy in recent times, but I like to say that one man's pain is another man's gain.
Just like every other market, there are "sales" in the stock market, and those sales are known as bear markets. Because of different reasons, people want to sell their investments, and that creates a pressure on stock prices, which go down. This is where the opportunities present themselves.
If you're an investor with a hefty chunk of your money in a stock that's tumbling down, that's not necessarily good news for you, but if you've been on the outside looking in, falling stock prices might give you an "in" into great deals, as long as the fundamentals of your planned investment are solid. Thinking outside the box has often led to great fortunes.
Looking past the financial sector, there are plenty of other sectors where company stocks have been battered because of the current crisis but whose business fundamentals are as solid as ever. This is where your research comes into play so you can determine which ones are worth buying.
Back to our previous point about understanding the basics, you will need to look at those companies' financials to determine whether or not the current fall in stock price is caused by the company not doing very well or just caused by widespread pessimism about the economy.
When you find companies whose financial performance is solid, are well-run, and are turning profits near or at their usual levels, you need to buy them even if most people out there are selling them. Doing so gives you a great chance of seeing great returns in the years to come, when the downward spiral comes to an end.
About the Author:
Carlton Hughes is a former financial adviser and has over 35 years of experience in the stock market. He regularly writes on several financial sites like Make Money In The Stock Market and his own personal finance blog, Personal Finance 411.
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11:13 AM
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