When you’re new to investing it can be difficult to separate out the noise from the truth. There is a whole industry out there dedicated to keeping you updated with market events, telling you which stocks to buy, which stocks to dump, and when to do so.
See, if you don’t know what confirmation bias is, you might be making all sorts of little mistakes without even knowing it. Read more »
The price-to-earnings ratio, or PE ratio, is one of the simplest but most popular financial ratios for estimating the value of a stock. Even though the PE ratio is simple, it’s an amazingly useful tool.
In fact, a study by Merrill Lynch found that 33% of professional investment managers consider the PE ratio before investing in a company. And one of the most famous value investors of recent times, Peter Lynch, was known to make good use of the PE ratio in his analysis. Read more »
It pays off since it stops me second-guessing my trades and getting out at precisely the wrong time (which is what usually happens). Read more »