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There is no magic potion or hidden secret to a guaranteed method of making a killing in the stock market.
Let’s be real, every business is in the business to make money. Their method of doing so depends on their level of integrity. It’s believed that the stock analysts reports are the inside scoop as to how a company is performing and the expected projections of profits. But is that really how it works? Take for instance, when news comes out on a particular stock that causes the price to rise drastically. The enthusiasm by the average investor is to jump on the band wagon of this “hot tip”. Doing so will continue to drive the price up, making the stock look very attractive. In the meantime, those who already hold the stock may not even buy additional shares. Why? Because they are waiting for the price to max out so they can sell at a profit. Another question is who is giving this information to the market? I don’t mean to sound skeptical here but, we as investors need to be careful not to get caught up in the artificial enthusiasm behind hot stock tips. The corporate scandals of early 2000 are a prime example of this sort of activity. Many Wall Street analysts, brokers, and executives unfairly profited from activity such as this. Information was either acted upon in secret before being given to the general public or false information was given to the public, while executives secretly benefited from the information. Although the government has strict rules concerning the fiduciary responsibility of publicly traded companies, many of these regulations were side stepped intentionally for the sole benefit of profit. By the time the government found out, executives had already claimed millions in profits, and the general public or investor was left bankrupt. What’s the lesson to be learned here? When investing be extra careful about how you use the information you receive. Remember to stick to your investment strategy, which should be based on factors such as, income level, investment knowledge & financial goals. What I learned in economics 101 still holds true: prices are based on the laws of supply and demand. When the supply is fixed, the price will fluctuate based on the demand. If demand is high, the price will go up. If demand is low, the price will go down. And thus the stock market also follows this rule. If you pay close attention, you’ll notice that when a stock is hot, its hot. But for some reason, once you purchase it, the price levels out. That’s because you’re not the only one whose playing the so called game. After adequate interest has been expressed, those behind the scenes, now execute their true plan. And that is to sell their share at a higher price. So the next time you hear about a “hot stock tip”, do some research to find out who disseminated the information and why? You just might be surprised.
Jacqueline Williams is Founder and Chief Financial Strategist of JE Financial Services (JEFS). JEFS specializes in providing training & development workshops focused on records management & systems implementation. Jacqueline brings to her clients more than 20 years’ experience in the accounting profession. Visit our website at http://www.bookkeepingsuccess.com/free-report to download a free copy of “Selecting the right Bookkeeper for your Business”
Let’s be real, every business is in the business to make money. Their method of doing so depends on their level of integrity. It’s believed that the stock analysts reports are the inside scoop as to how a company is performing and the expected projections of profits. But is that really how it works? Take for instance, when news comes out on a particular stock that causes the price to rise drastically. The enthusiasm by the average investor is to jump on the band wagon of this “hot tip”. Doing so will continue to drive the price up, making the stock look very attractive. In the meantime, those who already hold the stock may not even buy additional shares. Why? Because they are waiting for the price to max out so they can sell at a profit. Another question is who is giving this information to the market? I don’t mean to sound skeptical here but, we as investors need to be careful not to get caught up in the artificial enthusiasm behind hot stock tips. The corporate scandals of early 2000 are a prime example of this sort of activity. Many Wall Street analysts, brokers, and executives unfairly profited from activity such as this. Information was either acted upon in secret before being given to the general public or false information was given to the public, while executives secretly benefited from the information. Although the government has strict rules concerning the fiduciary responsibility of publicly traded companies, many of these regulations were side stepped intentionally for the sole benefit of profit. By the time the government found out, executives had already claimed millions in profits, and the general public or investor was left bankrupt. What’s the lesson to be learned here? When investing be extra careful about how you use the information you receive. Remember to stick to your investment strategy, which should be based on factors such as, income level, investment knowledge & financial goals. What I learned in economics 101 still holds true: prices are based on the laws of supply and demand. When the supply is fixed, the price will fluctuate based on the demand. If demand is high, the price will go up. If demand is low, the price will go down. And thus the stock market also follows this rule. If you pay close attention, you’ll notice that when a stock is hot, its hot. But for some reason, once you purchase it, the price levels out. That’s because you’re not the only one whose playing the so called game. After adequate interest has been expressed, those behind the scenes, now execute their true plan. And that is to sell their share at a higher price. So the next time you hear about a “hot stock tip”, do some research to find out who disseminated the information and why? You just might be surprised.
Jacqueline Williams is Founder and Chief Financial Strategist of JE Financial Services (JEFS). JEFS specializes in providing training & development workshops focused on records management & systems implementation. Jacqueline brings to her clients more than 20 years’ experience in the accounting profession. Visit our website at http://www.bookkeepingsuccess.com/free-report to download a free copy of “Selecting the right Bookkeeper for your Business”