There are two things that move stock prices. In the short-term, stocks are a popularity contest. How else can you explain some of the values of tech stocks today? People are voting with their hard-earned dollars. They love tech stocks…at least for now. Some day they will love something else.
In the long-term, company fundamentals like sales, earnings, and profitability matter. If a company doesn’t make any money and stops growing its sales, it is going to fall out of favor. Would you continue to own a private company if it lost money for a decade? I wouldn’t.
Be smart like these kids. Do your research into what you’re buying when you invest (or work with someone who does). It will pay off in the long-term.
About the Author: John O’Connor
John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.