2007-09-11 20:17:01 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
When the markets are erratic, it is not surprising to see a stock's price drop a handful of percentage points one day, only to see it make most of it back within the next few trading trading session.
For long term buy and hold investors, the general fall in prices that occurs during erratic periods can present buying opportunities.
In regards to stocks with good underlying fundamentals and prospects, an unwarranted drop of several percentage points caused by general market uncertainty could be an opportunity to buy the stock at a discount , as the investment worthy stock is likely to bounce back when the market restabilizes and the company's future successes emerge. For investors with a long investment horizon, a temporary dip is not likely to be noticed in the long run.
2007-09-12 05:06:01 · answer #1 · answered by Investopedia 3 · 16⤊ 4⤋
arbitrage. In other words, when the market is volatile like it is now, there are many more opportunities for stocks to be under/over valued because people are "overreacting". Those who can pick the right ones stand to make a lot of money in a short period of time.
2007-09-12 04:51:36 · answer #2 · answered by dan 4 · 4⤊ 0⤋
1
2017-03-01 12:07:45 · answer #3 · answered by estelle 3 · 0⤊ 0⤋
people watch the dow shifting around several hundred points in a day and think they see a money making opportunity.
2007-09-11 21:19:42 · answer #4 · answered by Anonymous · 2⤊ 1⤋