If a company that has been around for years has the highest stock price it's ever had, is there any reason to invest in it?
2007-09-12 10:22:18 · 4 answers · asked by wisemancumth 5 in Business & Finance ➔ Investing
Yes if you beleive that it will go higher - you might think this because maybe their revenues are at an all time high, maybe their profitsare at an all time high, maybe their balance sheet shows several assets which exceed the value of the stock, or maybe you think that a bunch of people will want to buy the stock.
2007-09-12 10:31:20 · answer #1 · answered by the_hilton 4 · 0⤊ 0⤋
Yes, but there are reasons it's high, if it's making a run because it's going into earnings or a split may push it up. Some stocks won't split they will just go higher. That being said, you run a bigger risk of losing more money if it starts to fall, they fall faster then they go up so be careful. Do your research and be sure you like the stock you are buying, but don't marry it, be ready to sell it if it starts to drop. Put in a stop loss order after you buy it so if it falls by 5% you can get out with a small set back. If you put in a trailing stop loss it will follow the stock price up and sell it if it starts down preserving your profit.
2007-09-12 11:20:11 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes. Many professional investors ONLY buy stocks that are making new highs. This means that something good is happening at the company.
Buying a stock that is low may feel like you're getting a "sale price" but the stock may be down because something bad happened and the company may not recover.
2007-09-12 11:18:34 · answer #3 · answered by Ted 7 · 0⤊ 1⤋
Yes but only if you believe it will continue to go higher.
2007-09-12 10:27:09 · answer #4 · answered by TexasTek76 2 · 0⤊ 0⤋