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Thursday, 24 October 2013

Stock Market – Can you buy or sell simply based on price movement?

Stock Investment
When we saw people earning in millions out of stock market, we envy on them. But, we forget to realize the hard work they put to research the stocks and the risk they took for the gain. Though stock market looks attractive and tempting to invest our hard earned money to multiply them in short period of time, we should be always alert on the price movement of the stock. It is always advisable to have experts guidance and use appropriate platforms to trade in stock market. Optionyard is a revolutionary binary options trading platform that offers a wide range of unique features to make it easier for traders to manage their risk and set the terms of the trade.The below illustrative story helps to understand the nuances in stock market and we should not simply believe the price movement to buy or sell the stock without analyzing the key financial metrics of the business.

Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10. The villagers seeing that there were many monkeys around, went out to the forest and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it.

The man now announced that he would buy monkeys at $50. However, since he had to go to the city on some business, his assistant would now buy on behalf of him. In the absence of the man, the assistant told the villagers. Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when the man returns from the city, you can sell it to him for $50.

The villagers squeezed up with all their savings and bought all the monkeys. Then they never saw the man or his assistant, only monkeys everywhere....

Moral: Don't simply believe in what you see, do your research before make a move
Image Credit: Pixabay

20 comments:

  1. Wow, that was a great story to get your point across! I am a big researcher so I agree with you 100%.

    PS - Thanks so much for visiting my blog and commenting!

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  2. What an interesting story! It reminded me of one of Aesop's fables! Thanks for your visit and comment on my blog.

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  3. Yes, I love that example of buying - selling of monkeys! I never play the stock market! Among other things because I have no money!

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  4. Thanks for popping by my blog. Did you know that you are a No Reply blogger? No one can contact you from your comments except to back track like this. Just thought maybe you didn't know- xo Diana

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  5. i have read that before and it is very good. i do not know enough about investing to do it well.

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  6. Loved the moral of the story!! My husband takes care of all our investing and always talks about investing long term in blue chip companies!! He works hard researching the companies we invest in/with!!

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  7. This is a good post, and even w/the research, there's still a good portion of luck involved. It's fun to play, harder to do it if you're being serious.

    Have a great weekend!

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  8. Oh what a story! I would never invest in the stock market, at least not now because I know I don't have the time to do the research necessary to make the right decisions.

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  9. WOW... there is a moral to that story... interesting to say the least...

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  10. That 's why I don't buy on the stockmarket! I play it safe.
    Have a great week!

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  11. A nice economic story that I have not heard, but which does put the finger on the value of things.

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  12. What the interesting story narrated beautifully. such nice post and capture...

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  13. Beautiful write up and photo! post written well. thanks for sharing.

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  14. Beautiful write up and photo! post written well. thanks for sharing.

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  15. Research, research and research!
    Thanks for enlightening post.
    Thanks for dropping by as well :)

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  16. Great story… And it's true: Don't always believe what you see!!!!! We sometimes make decisions BEFORE knowing the facts. That is NOT good…

    Thanks for coming to my blog.
    Hugs,
    Betsy

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