«Do
Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends?»
[5] Do
Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?
Not exact matches
Even without suggesting that money will
move «out of cash and into
stocks,» one might argue that relative valuations are
too wide, and that
stocks should be
priced to achieve lower long - term returns, given the poor returns available on bonds.
Too many traders see a position
move to their target
price, and then decide to hang on for a few more pennies: after all the
stock is hot.
If emotionally you find that
too hard to do because you're worried that
stock prices will drop once you start
moving back into
stocks, then at least try to shorten the amount of time it takes to get to your target portfolio, say, making the transition over three months rather than 12.
In the case of index futures
too, the index's level
moves up or down, replicating the movement of a
stock price.