Investment risk

[Novice Investing]

Originally Posted by Airelon

What you have to worry about there though, is the broad sector. I found out (the hard way) in 2001, that even stocks that are priced fairly? Can still suffer from the broader market. I was buying fair value, but they were still suffering from broader market downturn. DCA (Dollar Cost Averaging) helps mitigate the risk from the broader market in truly good stocks - but that is geared more towards investors, than traders.

Airelon:

1st: It is recommended that you buy below fair value. You then sell @ fair value. If you are lucky, you can sell above fair value.
2nd: Nobody can predict the broader market quite accurately. Shares that is trading below fair value, will eventually rise towards fair value.
3rd: My experience so far, undervalued beaten-down stocks do not follow the broader market. Example: Altria (MO), Financials like WM, KEY etc. in the early 2000, Merck (MRK), in the 2005-2007, clothing retailers (GES, RL, ANF, AEOS) in 2003-2006. Can't think of others on top of my head but you can check others as well.
4th: I agree with DCA. Been saved so many times with stocks that went down a lot in value, before eventually turning up quite significantly.

Of course, the toughest thing is to know what 'fair value' is. This is what I'm truly obssessed about.

[England]

Ok, so an update, I've been watching the stock drop and drop, and I said I would buy if were to hit $130. Since it's at $121 per share, I'm going to wait it out and hope it goes under $100. Hopefully lower than $83, but even that's pushing it. Anyways, under $100, I'll go ahead and invest $1000 like I said before, into it. I know this stock is going to rebound, I just don't need it to rebound now. At the same time, even though this stock is falling to all hell, I've been making small investments...very small...$5 into this stock. So currently, I'm holding 2.2467 at $272.39. By investing $1000 at under $100 a pop, I could get around 7-9 shares with 11 shares altogether. I'm ready to start taking risks, and I'm going to start it with this one.

[roz_e123]

well apple is certainly a hot buy right now. actually, as soon i read your post, i immediatley thought of something that i read not too long ago. it's this posting on this other forum i'm a part of too.

here's a link to that blog. since you're investing, you might want to read this little diddy:

MyWallSt.net - Blogs - Apple hits $200

[roz_e123]

so on this other site i'm on i write blogs all the darn time, check this one out cause i think it's one to read, the yen especially sounds bueno

"Sure Thing".....for Investors?
So I was browsing the MSN Money section (usual thing when I get the spare time) and I saw this article, titled "5 's... MORE

[akshaytalwar]

i would suggest first take smaller risks at a time and only when you are really confident should you go in for a big risk

[stockmarketreviews]

its wise option to diversify your investment instead of putting whole in single stock