Investing in conservative blue chip stocks may not have the appearance of a hot investment, high technology, but it can be very rewarding in any case, if the stocks of good quality have outperformed other asset classes over time. Historically, investing in stocks has generated a return, over time, between 11 and 15 percent per year according to your will. Shares outperform other investments, and to incur more risk. Investors in the stock market are at the bottom of the “food chain” corporate. First, companies must pay their employees and suppliers. Then they pay their bondholders. The following are the preferred shareholders. Companies are required to pay all these players first, and if there are remains of the money paid to shareholders as dividends or retained earnings. Sometimes there is a lot of money left for shareholders, and in other cases not. Therefore, investment in stocks is risky because investors do not know exactly what you get for your investment. What places are blue-chip stocks? 1. Great long-term return. 2. Unlike mutual funds, is a relatively safe investment grade long term there is no course fee. 3. You own a business. So much for the benefits – What are the risks? 1. Some investors cannot bear the risks associated with investing in the stock market and the risks associated with investing in a company. Not all blue chips are created equal. 2. If you do not have the time and skills to identify high quality companies at a fair price does not invest directly. Instead, you should consider a good bottom. Election of a chip company is only part of the game – to set an appropriate price is the second. Theoretically, the value of a stock is the present value of all future cash flows discounted at the appropriate discount rate. But like most theoretical answers, this does not fully explain the reality. In reality, supply and demand for a stock is the stock price daily, and demand for a stock will increase or decrease depending on the prospects for a company. Thus, stock prices driven by investor expectations of a company, the more positive expectations, the best stock price. In short, the stock market is a voting machine, and most of the time they vote based on fear or greed of investors, not on their rational assessments of the value. Stock prices may fluctuate significantly in the short term, but they eventually converge to their intrinsic value in the long term. Investors should consider the good companies with high expectations that are not yet included in the price of a stock.
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