Seven Forehead-Slapping Stock Blunders. Ignorance may be bliss, but not knowing why your stocks are failing and money is disappearing from your pockets is a long way from paradise.
In this article, we'll uncover some of the more common investing faux pas, as well as provide you with suggestions on how to avoid them. Tutorial: Major Investment Industries 1. Ignoring Catalysts The financial pundits, trade journals and business schools teach that proper valuation is the key to stock selection. This is only half of the picture because calculating P/E ratios and running cash flow spreadsheets can only show where a company is at a given point in time - it cannot tell us where it is heading. Therefore, in addition to a quantitative evaluation of a company, you must also do a qualitative study so that you can determine which catalysts will drive earnings going forward.
Some good questions to ask yourself include: Is the company about to acquire a very profitable enterprise? 3. 4. 5. 6. 7. Lastly, look for general trends. Perfect Stock Alert - Free Video Stock Alerts, Market Analysis, & More! Rare images beyond the naked eye. Chart Advisor Free Report 5 Patterns You Should Know. So you’re a believer.
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Those rankings can make for good chatter, but they're not always meaningful. And while short-term returns can sometimes help you understand funds' behavior, they tell you little about the long-term merits of a mutual fund. So what about the long-term leaders' list? Surely, over the long term, the funds with the best strategies and managers should rise to the top. I took a look at how funds are currently stacking up based on 15-year returns. Tailwinds Still Help As it turns out, some niche funds have persisted. BlackRock Global Natural Resources (SSGRX) tops that list, with an 18.17% average annualized gain. Still, these good long-term results suggest that it's possible to enjoy long-term success with more-narrow funds. Vanguard Health Care (VGHCX) instead.)