Don’t Be Afraid to Invest in Stocks

Don’t Be Afraid to Invest in Stocks
Snap up This Cost Exempt Instructional Video on Trend Analysis

The economic chaos of 2008, which erupted during the formative years for many young Americans, inflicted scars on millennials that are shaping their investing decisions today and possibly hindering their future retirement prospects. Ninety-three percent of millennials say that both distrust of markets and lack of investing knowledge make them less confident about investing, according to a new Capital One ShareBuilder survey released exclusively to CNNMoney. A similar analysis by State Street found that millennials are also holding a significant chunk of their portfolio — 40% — in cash despite historically low interest rates. The findings suggest young Americans may not be getting the exposure to the stock market that has helped previous generations accumulate wealth.

[Deflation is a] general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending. The opposite of inflation, deflation has the side effect of increased unemployment since there is a lower level of demand in the economy, which can lead to an economic depression. Central banks attempt to stop severe deflation, along with severe inflation, in an attempt to keep the excessive drop in prices to a minimum. Declining prices, if they persist, generally create a vicious spiral of negatives such as falling profits, closing factories, shrinking employment and incomes, and increasing defaults on loans by companies and individuals. To counter deflation, the Federal Reserve (the Fed) can use monetary policy to increase the money supply and deliberately induce rising prices, causing inflation. Rising prices provide an essential lubricant for any sustained recovery because businesses increase profits and take some of the depressive pressures off wages and debtors of every kind.

“The newer approach to security analysis attempts to value a common stock independently of its market price. If the value found is substantially above or below the current price, the analyst concludes that the issue should be bought or disposed of. This independent value has a variety of names, the most familiar of which is “intrinsic value”.

“Intrinsic value is an all-important concept that offers the only logical approach to evaluating the relative attractiveness of investments and businesses. Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life.”



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Profitable Investing Tips

Profitable Investing Tips is an informational website for men and women who want to discover trading & investing products and strategies and how to use them.

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