There are many ways to participate today in the securities markets and very different personal strategies used to achieve the desired investment success. When profitable as possible your money in equities by way of buying and selling shares you must decide, according to your own judgment, if you put your trust and capital calls shares of companies “Growth” (growth ) or “Value” (consolidation and value).
Let’s see what each of them consists of and what their main technical and fundamental analysis characteristics are, in order to be able to determine with greater clarity and knowledge of the cause what kind of investment is the one that may interest you.
This involves investing in companies that are supposed to be able to generate broad benefits in their normal operation or management and high profitability forecasts in a short period of time (1, 2 years). For this, investors assume the greater financial risk and pay higher target prices in exchange for above-average profitability expectations. They tend to be companies in the stock market, such as new technologies, the Internet, electronic marketing, pharmaceuticals, and health, or related to new sources of energy.
As it was already stated more than seventy years ago in the USA, the value investor is one that seeks the purchase of securities in “good historical companies”, but that for specific negative reasons, adverse economic situation or transitory legislative changes and without having obvious objective reasons, their actions are punished with sharp price drops to oversold levels that become clear investment opportunities for the medium-long term. The contagious psychology of the investing mass often leads thousands of global investors to make the same operational decisions based simply on rumors via the Internet, emotions and extended euphoria or the media noise interested at the moment.
COMMENTS AND BAG TIPS
In order to be able to make good investment decisions conveniently planned in value-type actions, you should observe various market circumstances in the stock markets, such as low valuation ratios with respect to corporate earnings obtained, high dividend yields or a clear valuation gap of a specific company (type Blue Chips) with respect to others of its same sector.
Always before investing your money in both growth and value stocks, you should carefully analyze at what time or cycle the stock markets are, what forecasts of future benefits are forecasted or what possible future political or economic-financial problems can be seen on the horizon of the variable income.
Assuming more financial risks never assures you receive higher yields for your capital (investment growth) at the end of the investment. As well as investing in stocks of companies that are “unfairly” punished by the stock market (value shares), it will not guarantee that after a few years their securities will necessarily recover past quotes.
It has never been said that investing in the stock markets is an easy task, nor that it is free of situations or moments of high volatility, uncertainties and fears. Only adequate personal investment training or good professional technical advice will allow you to have a greater percentage of success when making operational decisions in the purchase-sale of shares.
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