Talk to Your Financial Advisor before Buying Stocks
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Some value stocks have been hurt because the underlying company has recently had a tough time with a particular product, or upper management has experienced a temporary setback. If these developments are unlikely to have a significant bearing on the long-term health of business, the stock may be worth considering for investment.
Value investors are looking to buy a stock at a moment when it’s cheap because its current net assets are worth a dollar and the price is 40 cent. For a classic statement on value investing, see Benjamin Graham’s book The Intelligent Investor.
Which should you buy?
Should you invest in growth or value stock? You should diversify at all times. Growth and value stocks tend to advance at different times, depending on the market’s changing moods. A good way to take advantage of this situation is to invest equally in both, rebalancing every so often by adding money to whichever type is currently under 50% of your portfolio.
If you have less than $50,000 to diversify with individual stocks, consider mutual funds that invest in growth stock, value stocks, or both. As with any investment decision, talk with your financial advisor before deciding which stocks or funds are most appropriate for your specific financial needs.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
