THE MYTH ABOUT HIGH-PRICED AND LOW-PRICED STOCKS

In one of our previous articles, we had spoken about the misconception about Large-Cap stocks being the only type of stocks which can provide secure and steady returns. Today we have another interesting and broadly talked about topic – the myth about High-priced and Low-priced stocks. To just give you a feel of this topic, let us look at an example right away.

  1. High-priced stock – Eicher Motors, CMP: Rs 18,000
  2. Low-priced stock – Ashok Leyland, CMP: Rs 72

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5 COMMON MISTAKES EVERY SMART INVESTOR SHOULD AVOID

Investing Mistake #1 – Buying the stocks at high valuations

 

The difference between an investor who makes money and the one who losses money is his understanding of valuations of the stocks.

When a stock is trading at a high valuation, the possibility of more upside is unpredictable and therefore a common investor gets stuck in this trap and losses money once the stock undergoes a correction. Continue Reading