Question

Consider the opinion: "Stocks sometime produce stellar returns for a period of time, but then they fall in value so dramatically at times that it makes me want to just avoid them altogether." What do you think?

Answer 1

This is the general tendency of various stocks because they are providing stellar returns during a very short span of time and they will be not providing any return in a long span of time so those who are holding up on the stocks can gain because they will be making the gains in no time.

So, it can be said that it is all about patience and sticking to the fundamentals and sticking to the stocks for the longer period of time because stocks can fall in value during a short span of time also, if they are overvalued and it will take time before they are rationally valued, so one should be trying to invest patiently and for the longer period of time in order to maximize his overall profit and maximize his overall gain because these stocks are often going through various economic cycles and company-specific cycle so they are consolidating on the upside and the downside also before they are giving a Breakout and hence an investor should always be trying to hold onto the stocks for longer period of time rather than looking in for short gaines and hence patience is the key for the investing in the longer period of time in order to maximize the capital appreciation.

I think that one should be always patient while stock investing and they should be investing for longer period of time and it should be based upon fundamentals rather than just an idea to make quick money over a short period of time so one should be trying to deal with the bad times of the company and they should be trying to stay patient in due course of action when the company is not providing with the rate of return even the fundamentals of strong but company can really flourish in the short run and they can provide exceptional return, so one should be needing to hold onto the stock for a large period of time in order to earn from them so I will be advocating that one should not be getting desperate to make quick returns in shorter time instead he should be trying to hold onto stocks for longer period of time in order to maximize through his value investment because one can never time the market about gaines.