How can I evaluate the performance of shares?
Assessment of the performance of shares is a more complicated matter than simply tracking whether the stock price has increased or decreased over time. Investors must put performance in context, such as taking into account time, overall market performance and industry performance. In addition to looking at the price, investors can consider volatility and revenue as important factors. For example, it is important to select a time period for assessment. If the period of time is too short, the investor may attach a disproportionate level of importance to the results; If the period of time is too long, they may be the result of factors that are no longer relevant. It is also important to consider changes in stocks proportionally, rather than simply unprocessed or reduced. This is because the price could move largely because of the overall market. For example, this could have popped up during the boom of the stock market or dropped during the market crash. It makes sense to compare shares with the performance of the overall market in this period. This can be done either in comparison withWe market, or we look at the performance of indexed products such as the tracker funds.
It is possible to go even further in finding a fair comparison. Instead of simply comparing the performance of shares together with the market performance, the investor could compare with other shares in the same sector. This gives a better overview of the strength of each stock. For example, bad publicity about diabetes could mean that all SODA FALL FALL shares, but a closer exam may show that the shares of one company have fallen by much lower margin than the others. This may indicate that society is fundamentally stronger and its reserves can be more for market shocks.
Another problem to look with the performance of inventory is volatility. This is how the stock price has changed back and forth. This can provide a clearer overview than simply compare two points in time. Especially volatile shares seem to work better with such pBy means of time, volatility could mean that this is a more risky investment.
The performance of the shares is not entirely about the prices, as shares can earn the investor's money before they are sold. This is because companies publish dividends, usually once or twice a year, investors. The ratio of the annual payment of dividends to the price of shares is listed as a yield. This will be particularly interesting for the so -called value investors who focus primarily on stocks to make money in this way.