It’s easy to get caught up in stock prices as they move up and down, especially when there are large swings. However, focusing on share prices can actually be hazardous to your portfolio’s health if you end up overtrading due to emotion.
Here’s why you should ignore share prices and focus on other things that are more telling.
Why share prices don’t tell you much
The share price doesn’t tell you much in terms of what value you’re getting for what you are paying. Adding the price-to-earnings ratio (P/E) to the picture makes it clearer. Read More…
I see i still have to d a lot of learning. To me, share price is the key. Ok, yes i know if the price gets too high that i’m too late and should not think about buying in. But isn’t the famous saying buy low, sell high? That’s all about share prices.
I wish they used Black Berry as a case study in this article. Many people thought they were going to make a comeback. It never happened. I wonder if the underlying #s predicted it.
Thank you! The article briefly talked abotu EPS. So many people are obsessed with PE and forget about the more important Earnings per Share.
TSX: BNS .. That has been my saving grace for years. Thank you Nova Scotia!
Long-term wise it’s still better to focus more on fixed income proven winners. I’d be happy to list some of my better performers if anyone is interested.
It isn’t just P/E. Management and ongoing hoopla in the industry itself also affects things.
This is why i still prefer to get my hands on hot IPO’s. Although hard to get, if you have the proper contacts you can make some good returns on new releases.
Just buy into a fund and call it a day 🙂