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Business Making: The Greatest Myths Of The Security Market Part 1

If you would like to invest money into the security market you should know all the nuances of it that is why it would be useful for you to read this information:
Myth ?1
The coefficient of the price relation to profit shows whether shares are cheap or expensive.

Coefficient of the relation of the price to profit is easy find. Practically in any financial edition, at least in the West, coefficients of the relation of the price to profit are published. It seems that at discussion of shares everybody speaks about this indicator. Then this coefficient is the fine indicator in a share choice.

Correctly? Incorrectly!

If someone have told that the coefficient of the relation of the price to profit “Corporation of Pyramids” is equal 7, and at “the Company of Soap Bubbles” it constituted 14, you would began to buy “Corporation of Pyramids” instead of “the Company of Soap Bubbles”? Maybe yes, but you wouldn’t feel confidently, making similar decision. Why? Because it is necessary for you to have more information before to make the decision on acquisition of the share of any company, any investor will collect a maximum of the information for accepting correct decisions. One of the important points which you should know is a stock value of each company on the basis of profit brought by them, profitableness and other key financial data. Differently, you would like to understand what actual value of these shares. Coefficients of the relation of the price to profit in any way haven’t reflected a stock value!
That is really necessary for the investor, so this ratio of real cost and the price. A sign a ratio of real cost and price, investors could specify at once, whether the price for shares is low, high or real. But it means that we need to calculate cost somehow. Certainly, there are theories and formulas for actual value calculation. But they are difficult and some skilled investors even say that they are incomprehensible. Hence, the majority of investors, even professionals, begin not with actual value of shares! They resort to such trivial means, as comparison of coefficients of the relation of the price to profit.
Myth ?2

To earn good money in the security market, it is necessary to assume availability of a high risk.

Recently one woman has told to me: “I am really afraid of shares. I don’t presume to lose the hardly earned money”. It is impossible to tell that the high risk at investment in securities doesn’t possess certain advantages. Many investors have lost considerable amounts of money in the market. The show of investors thrown out from windows in 1929 eloquently reminds of the risk which is an integral part of investment in securities.

Crash of 29th and 87th years, failures of the software in the conclusion of stock exchange transactions, sale of shares by persons and the organizations having by the insider (confidential) information, acquisition at the expense of borrowed funds, etc. also have brought the contribution to creation to investment in securities the image of a casino. Substantially investment community is the worst enemy. And it is very bad, because investment in securities is one of the best methods to amass a considerable fortune to the average person, and actually it should not be obligatory very risky business. For this purpose it is necessary only a little simple technician and certain discipline. Actually, it can be much safer, than investment in real estate, subjects of a collecting or your own business enterprises.

It is very crucial that government, despite this recession is not abandoning to help small businesses. And small business grants can be a real helper right now.

But, surely, you should remember that today the fight for small business grants as well as for other types of grants has become more fierce. This is logical – more businesses need them. So before you start your fight for the small business grants, please check out this blog for more
details about grant industry.

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