Opportunity Through Insight

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

People’s opinion of a company’s future potential is a key factor upon which the stock market is built. Therefore, as an analyst, it is important to not only understand the fundamentals and the strategy of companies in which you are looking to invest, but also how the rest of the market is viewing the stock’s prospects. This level of understanding will help interpret abnormal swings in a stock’s price to determine if it is simply an irrational reaction to a given event or a sign of larger issues.

In a previous post, I wrote about the non-measureable aspects of stock analysis and human emotion is one of the largest, unquantifiable factors driving movements in market prices. Having the insight to separate irrational price movements from the pack is a key factor that can lead to positive future investment performance.

I’ve come to learn that much of Wall Street is very short-term oriented, which can lead to these types of price movements. A classic example is when a company enters into an investment phase to develop new products, expand into different geographical markets or update its technology infrastructure. These spending programs are often needed to transition a company to its next growth phase, typically a good thing to invest in. However, this pressures a company’s growth prospects in the short term shares generally take a beating.

These types of situations are opportunists we love to find for our clients, but require a thorough understanding of the company’s growth strategy and insight to gain confidence. This also requires a longer time horizon and likely an above average risk tolerance, both in exchange for outsized potential returns.

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Five Reasons Your IRA is Deflating, and What to Do About It

By Craig Lemoine, Director of Consumer Investment Research Stocks, bonds and mutual funds have had a rocky start to the year. The S&P 500, a broad measure of the United States stock market, was down 4.6% over the first quarter. Mutual funds holding stocks and bonds have also lost value. …

What You Need to Do 10, 5 and 1 Year Before Retirement

by Jamie P. Hopkins, ESQ., CFP®, LLM, CLU®, ChFC®, RICP®  Regardless of how far off you are from retirement, there’s one main goal your planning should be working toward: saving enough so that you don’t outlive your money. 

1 2 3 84 85 86

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation

TweetsFollow Us