Saturday, 1 September 2012

Investment Ideas From The Top 5 Industries At A 52-Week Low

Studies have shown that beaten-down stocks may be a potential buy if an investor has the stomach for volatility and is able to withstand the slings and arrows of outrageous fortune in order to reap the benefits of long term value investing. The caveat is that stocks that have experienced a precipitous decline are often riskier than other stocks. The reason is because there is an inverse relation between volatility and price. In other words, low price stocks have higher volatility, which is why these companies often have higher default risk due to an increase in financial leverage. For instance, stocks which are trading below $1 in Nasdaq may announce a reverse stock split in order to gain compliance with listing requirements, and they are also perceived to be more risky trades. Read more here: http://seekingalpha.com/article/292143-investment-ideas-from-the-top-5-industries-at-a-52-week-low

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