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Optimism of the Eternal Sunshine
I bet you thought this post was going to be about happiness and sunshine well, sort of. I will just say that my outlook on things is pretty sunny this includes the current conditions on Wall Street. Everyone is saying the sky is falling. The sky is falling. It’s getting dark, but far from falling.
Hold the phone I have seen this before at Wal-Mart. Yeah, Yeah, I have seen this! I love Oreo’s and if I go to Wal-Mart I can get them 3 for $1. It’s awesome because I love Oreo’s when you dip them in milk and yummy, anyway, so they normally cost me $3.50 if I can get 3 of them for a buck I am in.
You’re probably lost at this point. Well the sky is falling so to speak on stock prices. So, stock prices that used to be high and have taken a dramatic tumble and could go lower. Can you say discounted?
Yes, stocks that are discounted I can buy more of them at a cheaper price alla the Oreo example. Financial types have a fancy name for this called dollar cost averaging. It basically is a technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high. . Just remember the Oreo example. I’d rather buy them on sale.
2 Keys to Buying a Discounted Stock.
1. Cheap Price
Look for a company that has a stock price below what they were normally trading. Sometimes you want to look for stocks in and around their 52 week low or that are just undervalued for the type of company that they are.
2. Good Company
I don’t like imitation Oreo’s I like the real thing. So look for a company with strong fundamentals. Good p/e ratio, strong sales growth, track record of growth. A couple good reads to help understand how to do this is “Buffettology” by Mary Buffett, and Check out www.msn.moneycentral.com to help with researching good companies.
I am an optimist a bull at heart I know the stock market will always go up. Since its inception we have gone through a great depression, a number of recessions and other turmoil in the world and the market continues to grow. So there is sunshine on the horizon don’t forget to wear sunglasses.