Expensive stock – when to pay a lot of good stuff?

Which one is a better move to buy high-priced hot stocks or not moving low-cost stocks? You may not have any questions to answer that question; it is best to overrun an expensive stock and still make your money instead of a cheaper, not profitable stock. First of all, no one wants a stock that does not make money, regardless of price. Second, buying expensive stocks is just a good move if the stock still has room for growth.

Look at the numbers

Consider two hypothetical stocks. Stock # 1 is an expensive stock, showing a price-earnings ratio of 35, while stock # 2 is only 15% P / E. You might think that stock # 1 is overestimated, stock # 2 is a good deal. Since you are a good investor, you will not just look at an indicator, but in this case, each indicator checks to say the same thing

There are two fake "laws" working here, You need to know. First of all, not every expensive stock just because it has been rising; second, not everything will drop is rising. If you fall into the trap of these two ideas, you may try to buy stock # 2 (and get a tough stock) just because it's position and ignore the stock # 1 because it's an expensive stock. It is reasonable to assume that stock # 1 will drop or fall at least. Its value is more than all its indicators, close to a year high.

Just because the stock is cheap, it is not necessarily the stock. A good deal; on the contrary, expensive stock is not necessarily a bad deal. Know you now know that you will buy Google stock when it's a $ 250 stock? So $ 300 per share?

Buy Low

Buy low, sell high is the ultimate goal, but the price has been hovering around $ 500. ; But do not be fooled. Just because the stock price does not automatically mean that it will rebound. Those value invests successfully to buy low and sell high, but they are very selective about what they buy. The price of the stock is only one of many factors. The biggest thing is whether the stock has the opportunity to grow over time, without regard to its image as an expensive stock.

Buying a high price

Looking at this example, buying a buy stock, the expensive stock is good if you have confidence that the stock will continue to be a winning stock.

You may wish you have already bought it because it is a company that it is a company that grows 30% per year and there is nothing to stop its progress is worth paying , Because the current price may be the lowest six months ago because of the stock price, but this should not stop you from entering if you do your research. In addition, sometimes the stock just does not drop. Even though many people learned hard lessons at the end of the boom, $ 20 per share, $ 100 per share did not always fall back to $ 20.

The purchase of expensive stock seems to violate everything you have learned in investing in the stock market. Expensive stocks are a risk to investors, investors do not spend time and research to ensure that the company is still expected to grow. Investors should use all the available tools to determine whether the expensive stock is still a good deal. Despite the way the sound is sometimes paid a lot can be a good thing