A sudden downturn in price after entering a position may discourage many investors. However, it can be beneficial to double down by increasing your position, thereby “averaging down.” An example:…
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Asset managers often increase holdings in successful stocks right before the end of the fiscal quarter to make it appear as though their positions did better than in actuality. Holding…
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The Forward P/E Ratio is simply a stock’s share price divided by future analyst projections of the company’s earnings. While analyst projections can be fairly accurate, they are also subject…
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Stocks react to positive news by trading at higher prices as trader confidence in the stock rises. A “gap” occurs when a stock opens at a price significantly higher than…
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In psychology, “herd mentality” refers to the individual’s proclivity to follow the group rather than their intuition. The same principle can be applied to the stock market. An investor may…
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What are pre-market and after-hours trading and why are they essential in understanding the markets? The New York Stock Exchange (NYSE) and NASDAQ’s weekday trading window is from 9:30 a.m.…
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The P/E Ratio is simply a stock’s share price divided by the company’s earnings. A high P/E ratio indicates that a company could be overvalued by investors, while a low…
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Stock analysts evaluate companies and offer their opinions about future trajectories of a given stock price. They consider historical performance, industry growth, management guidance, and other factors to make projections…
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Often, traders may have uncertainty or pessimism regarding a particular trade or investment position. If you are “in doubt,” it is sometimes best to “get out” of your investment. By…
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