Is the Risk Higher with a Higher Stock Price?
Investors want to buy low and sell high; that is how profits are made. From this perspective, a higher stock price may seem riskier as there is a higher chance for reversal. The real question though is whether the price is too expensive. To answer this, there are other factors to be considered like the financial reports, the future prospects (any catalyst for growth) and the price resistance and support levels. Only then can one determine the risk-reward ratio. One also has to be wary of value traps where the stock trades consistently below the book value.
Always have a safety margin and don’t go all in unless the probability of success is certain.
Disclaimer: The above sharing is my personal opinion. It is not financial advice or a recommendation to invest. Please consult a financial advisor and consider your investment objectives, financial needs, financial position and risk profile before making any investment decision.
Always have a safety margin and don’t go all in unless the probability of success is certain.
Disclaimer: The above sharing is my personal opinion. It is not financial advice or a recommendation to invest. Please consult a financial advisor and consider your investment objectives, financial needs, financial position and risk profile before making any investment decision.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Mrrichierich : Usually it’s the other way around!! The lower the price the more viotile an Underlying is!!
RobbinL : I think each stock has to be looked at individually they are all individuals with different factors that determine the value; no one can make a determination based on the price of the stock at that time unless of course they have some Insider information or an unshakable belief and faith in that stock such as AMC Apes have regarding that stock.
RobbinL : past performance does not equal future performance. Assess a company determine if you are getting in at a good price and if your assessment was correct you should do well.
DadacaiOP RobbinL: I agree. Thanks for sharing your valuable opinion.
DadacaiOP RobbinL:
buzzycox55 : I believe that the higher the stock most likely to go down quick.and then you don't gane nothing no interest back. I believe that anyways.but that is just my opinion.
Mark Goh2 : no pain no gain