Thursday 21 October 2010

Weeding out over-heated stocks

Avoiding over-priced stocks that could plunge anytime is as critical as picking the right stocks. 

Buying over-heated stocks and losing money in a bubble burst is not an uncommon phenomenon in the markets.

Stocks that have moved up the ladder very quickly are potentially risky. The sudden spurt could be based on a rumour or event not backed by strong fundamentals. 

Good market conditions or bull runs do not last forever. Investors, who believe that good times are here to stay often burn their fingers. 

On a similar note, an over-valued stock has little scope or space for upward movement and could lose its momentum anytime.  

A little bit of research and analysis will help investors make prudent investment choices even in bear market conditions.


http://economictimes.indiatimes.com/features/financial-times/Investment-tips-Pick-the-right-stock-at-right-time-for-returns/articleshow/6759442.cms

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