Why The Stock Market Isn't a Casino!

Atomic weight or atomic mass used in stoichiometric calculations. Kerching Casino was created in 2007. Hardly anyone has gotten rich by investing in bonds, and no one does it by putting their money in the bank. Knowing these three key issues, how can the individual investor avoid buying in at the wrong time or being victimized by deceptive practices? 3) It is the only game in town. Outside of investing in commodities futures or trading currency, which are best left to the pros, the stock market is the only widely accessible way to grow your nest egg enough to beat inflation. But when stock prices get too far ahead of earnings, there's usually a drop in store. Compare historical P/E ratios with current ratios to get some idea of what's excessive, but keep in mind that the market will support higher P/E ratios when interest rates are low. 1) Consider the P/E ratio of the market as a whole and of your stock in particular. Most of the time, you can ignore the market and just focus on buying good companies at reasonable prices. Type your answer here... 2) When inflation and interest rates are soaring, the market is often due for a drop...be alert. High interest rates force companies that depend on borrowing to spend more of their cash to grow revenues. At the same time, money markets and bonds start paying out more attractive rates. If investors can earn 8% to 12% in a money market fund, they're less likely to take the risk of investing in the market. Look for red flags in the financial news, such as the beginning of the recent housing slump or the international credit crisis. Don't let fear and uncertainty keep you from participating. If you treasured this article so you would like to collect more info regarding online casino hawaii generously visit our internet site. Of course, severe drops can happen in times of low interest rates as well. Even poor market timers make money if they buy good companies. Remember that the market goes up more than it goes down. Over the long haul (and yes, it's occasionally a very long haul), stocks are the only asset class that has consistently beaten inflation. The reason is obvious: over time, good companies grow and make money; they can pass those profits on to their shareholders in the form of dividends and provide additional gains from higher stock prices. 1) Yes, there's an element of gambling, but- Imagine a casino where the long-term odds are rigged in your favor instead of against you. Now you have a more reasonable approximation of the stock market. Imagine, too, that all the games are like black jack rather than slot machines, in that you can use what you know (you're an experienced player) and the current circumstances (you've been watching the cards) to improve your odds. "The whole thing is rigged." There may be just enough truth in those statements to convince a few people who haven't taken the time to study it further. One of the more cynical reasons investors give for avoiding the stock market is to liken it to a casino. "It's just a big gambling game," some say.


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