In the short - term, the market's tide will raise and lower all boats, but value investing works in the long - run, and unless you're in a late 1990's type mania, I think it probably is best to completely ignore the overall market and just focus on looking for
undervalued stocks of individual companies that you think will be doing more business in five years than they are now.
In the short - term, the market's tide will raise and lower all boats, but value investing works in the long - run, and unless you're in a late 1990's type mania, I think it probably is best to completely ignore the overall market and just focus on looking for
undervalued stocks of individual companies that you think will be doing more business in five years than they are now.
Shares of that package are then traded on an exchange just like
the stock of an individual company.
So why would we want to trade instruments that, as a general rule, have less price movement than
stocks of individual companies?
If I hold
the stock of an individual company then I have an equity asset.
These are designed to imitate an index, and as such lessen some of the risks associated with investing in separate stocks, such as
the stocks of an individual company potentially crashing.
There is just too much risk when Investing in
the stock of individual companies.
One way to evaluate investor sentiment towards specific securities is to analyze the short interest in
the stock of individual companies.