Its success stories include the discovery of the «inverse cubic law», an apparently universal form describing the distribution
of fluctuations in stock prices and market indices.
An additional benefit of using dividends in evaluating a company is that since dividends only change once a year, they provide a much more stable point of analysis than metrics that are subject to the day - to -
day fluctuations in stock price.
Even though the price of bonds do change, historically those fluctuations are WAY smaller than
fluctuations in stock prices.
However,
the fluctuations in stock prices notwithstanding; there is a way you can invest which can put the odd to your favour.
One of the characteristics of stock markets is
the fluctuation in stock prices.
While some dividend stocks may pay high dividend yields,
fluctuations in stock price can destroy any positive earnings.
For instance,
fluctuations in stock prices will change the amount of a gain or loss, and these changes themselves could change what tax bracket you wind up in, or change whether or not the loss winds up being fully deductible against ordinary income.
Also,
fluctuation in stock prices can be a good signal that you will be able to make profits from such penny stocks.