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What are Common Questions about Stocks?

People tend to focus on the mystery of the ‘get-rich-quick’ stock market when they start asking questions about stocks, but there are also good questions among them.

The question most people have is, “Can I get rich just buying low and selling high?” And the answer, of course, is “Yes, absolutely!”

The caveat, however, is knowing when the stock price is low and when it will peak. In stock investing it is often said that hindsight is 20/20, so it is infinitely easier in retrospect to identify times when someone should have bought or sold shares and reaped the maximum possible gains from their investment.

Technical indicators strive to identify points at which trend lines seem to suggest trends and reversals, but often these will jump the gun or miss the mark. The “random walk hypothesis” is a good summation of the reality of things in the market: because markets are going to change based on an unpredictable number, degree, and frequency of new information, it is foolish to suppose that the market can be “timed” with precision.

Timing the market means to get in and out at just the right time, but, again, no one has a crystal ball. Few people knew the “Brexit” vote was going to go the way it did, and immediately after it did, no one thought the markets would do so well in that scenario, for example.

What is a Stock Downtrend?
What are the Basics of Stocks?

Keywords: stocks, technical indicators, trend reversal, investment basics, Brexit, random walk hypothesis, market timing,