Investing In Active Stocks

Investing in Active Stocks

By www.ProfitableInvestingTips.com

http://www.profitableinvestingtips.com/

www.ProfitableInvestingTips.com

Beware when investing in active stocks.

When a stock hits the front pages of the

financial news because of high trading

volume it may not be because the

company is doing well.



A current example is JPMorgan.

The largest bank in the United States,

JPMorgan Chase is in the news

because of trading losses of well over

$2 Billion in the last month and a half.



The company has assets of roughly $2

Trillion so it not going bankrupt over the

recent losses. Nevertheless the stock

price has fallen.



If you are interested in investing in active

stocks you would probably wait until this

one bottoms out and then hope to get a

deal on the stock price before it

recovers.



However, if you are considering holding

this stock for the long term fundamental

analysis is in order.


http://www.profitableinvestingtips.com/investing-trading/fundamental-analysis



And that fundamental analysis has to

include just how this company of so called

professionals managed to lose so much

money in equity swaps over such a short

period of time.



Timing when Investing in Active Stocks



The best time to have sold JPMorgan

would have been at the end of last week

before the company announced its recent

losses.



Since that was not possible the best

time to buy the stock will be when it has

lost its maximum before recovering.



However, if you are interested in investing

long term in this company you want to

look at discounted anticipated earnings

over time, the stock’s intrinsic value.



Considering what is happening in Europe,

banks may get hit across the board. The

Greek debt situation seems to be leading

to a Greek financial collapse.


http://www.profitableinvestingtips.com/investing-trading/greek-financial-collapse


That may lead to debt defaults in Spain,

Portugal, Ireland and Italy, the rest of the

so called PIIGS group.

Runs on banks in these nations are quite

possible if they have a lot of Greek debt in

their portfolios.

Later you can include debt from the other

countries listed.



When a stock hits the front pages of the

financial news because of high trading

volume it may not be because the

company is doing well.



A current example is JPMorgan.

The largest bank in the United States,

JPMorgan Chase is in the news because

of trading losses of well over $2 Billion in

the last month and a half.



The company has assets of roughly $2

Trillion so it not going bankrupt over the

recent losses. Nevertheless the stock

price has fallen.



If you are interested in investing in active

stocks you would probably wait until this

one bottoms out and then hope to get a

deal on the stock price before it recovers.



However, if you are considering holding

this stock for the long term fundamental

analysis is in order.





And that fundamental analysis has to

include just how this company of so

called professionals managed to lose so

much money in equity swaps over such

a short period of time.



Timing when Investing in Active Stocks



The best time to have sold JPMorgan

would have been at the end of last week

before the company announced its recent

losses.



Since that was not possible the best

time to buy the stock will be when it

has lost its maximum before

recovering.



However, if you are interested in investing

long term in this company you want to

look at discounted anticipated earnings

over time, the stock’s intrinsic value.



Considering what is happening in

Europe, banks may get hit across the

board. The Greek debt situation seems

to be leading to a Greek financial

collapse.





That may lead to debt defaults in Spain,

Portugal, Ireland and Italy, the rest of the

so called PIIGS group.

Runs on banks in these nations are

quite possible if they have a lot of Greek

debt in their portfolios.



Later you can include debt from the

other countries listed.

The contagion could spread to banks

in the USA and then stocks of

JPMorgan, Wells Fargo, and the rest

could be suspect. Investing in active

stocks could then be a matter of

waiting, again, for a slide stock prices

to reverse itself.



Short Term Investing in Active Stocks



Active stocks that have gone down in

price do not always deserve the price

drop.



For example when another company

attempts a hostile takeover the stock

price may rise on speculation and the

willingness of the potential buyer to bid up

the price.



If the buyout fails and is overleveraged

the stock price may fall dramatically,

below the price that fundamentals would

support.



In this case short term investing in active

stocks is a good idea, provided that you

have done your homework.



Buy when the stock bottoms out and sell

when it comes back to a reasonable

price. Then keep the stock only if it is a

good stock investment based on its long

term fundamentals.


http://www.profitableinvestingtips.com/investing/good-stock-investment


As always we are not suggesting that one

buy or sell JPMorgan or any specific stock.

The point of this discussion is to present

an example of thinking through the

process of investing in active stocks.


For more insights and useful

information regarding investments

and investing, visit

Investing In Active Stocks

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Transcript of Investing In Active Stocks