Very shortly.
Growth : buy stocks with high growth expectations , they are not cheap but have a great potential.
Value : buy stocks undervalued and with high dividend yield .
In theory the second class should be less risky . But let's look at few cases .
Let's take Fabege , a real estate company based in Stockholm . If examined around 1 year ago it had P/E close to 10 , a yield of say 6 % and a P/BV near 1 : you'd buy it and now have a loss around 30 %! .
Otherwise DSG , listed in London : more or less the same indicators and an actual loss (if bought 1 yr ago ) of 2/3!
Of course , if you trust the company , you keep the stocks and wait .
Let's see another example : Outokumpu , based in Finland , same fundamentals as the two stocks abovementioned , in one year has started from 30 landed to 18 and then arrived to 32 €.
So , how to choose what and when buy and how to decide what and when sell ?
You should have a method.
No comments:
Post a Comment