Price vs. Value
If everything else is same, lower price is a better value.
Returns vs P/E Ratio

Returns are better if you buy at a lower P/E multiple.

Volatility
Stocks never go up or down in a straight line.
Corporate Earnings vs. GDP

Over a long term, private sector earnings track GDP.

Population Growth
World population continues to grow - potentially increasing demand for everything.
Markets are Efficient in the Long Run
In the short term, the stock market behaves like a voting machine, but in the long term it acts like a weighing machine (i.e. its true value will in the long run be reflected in its stock price)
Direction & Timing
It is "easier" to be correct on the direction of a stock price than on both its direction and timing of the move.
   Login to remove ads X
Feedback | How-To