A second opinion to boost your portfolio's health
Article Abstract:
Investors can value stocks ina number of ways, some of which are more complex than others, though more complex methods are not necessarily more accurate. The dividend discount model is the basic method, and involves setting a capital value on forecast dividends, and relating this to long-term growth and the rate of return needed by the investor. There are variations such as the price/earnings ratio model, the price to book value model, the price to sales model, price to free cash flow model, and the return on equity model.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
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The alpha to omega of betas
Article Abstract:
Charts can be used to evaluate stock prices, and beta coefficients or betas are a measure of risk. Investors aim to avoid risk, though returns tend to be higher when higher levels of risk are accepted. Returns from stock ownership have tended to perform better than other assets over the longer term, though losses have sometimes lasted a nuber of years. Betas have limitations and they tend to function better in groups. They measure risk through stock price volatility and can be fine-tuned to perform better.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
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Flat-topped triangles
Article Abstract:
Investors can use graphic methods to identify patterns in stock prices. One such pattern is the flat-topped triangle, which often occurs following a strong rally. Resistance then appears every time the stocks rally, until a new rally occurs above the previous rally. Buyers predominate after selling pressure peters out. The case of Severn Trent can be used as an example of this pattern, since resistance started to occur from Jan 1998, following a long-term upward trend.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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