what did i learned from this project

Stock Investment Project : Learning Evaluation

The stock market is like a game where there are winners and losers . It is therefore important to learn the rules in to succeed and gain a high level of knowledge about the market which can be achieved by learning investing strategies . Evaluating stocks is basically assessing the efficiency and potentiality of companies to earn . Basic financial tools like the computation of Earnings per Share , Price to Earnings Ratio and Return on Equity may be used to initially evaluate stocks but in predicting the movement of stock

prices , one can rely on technical interpretation of prices and volumes of stocks in the market as analyzing the economic environment . Another purpose of evaluation is for mitigating stock market risk which is complicated because while some financial and economic data is quantifiable , the future remains uncertain and unpredictable

Beyond the technical and financial evaluation methods , any investor must have a thorough understanding of efficiency of the stock markets such that all traded equities demonstrate all information needs exist and all investors share a somewhat similar idea about future . In which case Capital Asset Pricing Model (CAPM ) for determining appropriate rate of return of an asset becomes more reliable . Other sources of information to validate any prediction include financial news and analysis and advisories on stock investment . In my opinion , the efficient market hypothesis (EMH ) is relatively true but it entails contextualizing data in the right time horizon , understanding the kinds of investors and ability to cope with the dynamic nature of the markets . Moreover , in as much as investors act on the basis of perfect knowledge , it must be noted that the participants ' perceptions is part of the market forces that influence the market as well (Davidson ,

, 2002 ) Because of this many novice investors like in me are tempted to change portfolio time and time again

Stock investment is fairly a simple procedure yet complicated when different information and data are considered . In my short portfolio management experience , I believed that a simple Buy-and-Hold Strategy is the best strategy to control risk and ensure earnings . It is therefore necessary to define one 's objectives in investing in stocks . And after investing , one should continuously be updated about information and insights about the market and the economy

REFERENCE

Davidson ,

(2002 . Financial Markets , Money , and the Real World Edward Elgar Publishing...