John Kim, Regarding stock price vs. stock value....
This must be lecture day for me....
In my experience, very few stocks under $5 have panned out to be anything more than losers, which was why they were $5 stocks in the first place. They are notorious gambles, and what most little investors forget is that lots of base hits almost always add up to more than a home run or two.
Building wealth slowly with good stock selections, be they $10 or $50, and being happy with 20-30% returns year in and year out is the most important thing you can do. The lure of easy 100% gains often leave novice investors with little more than tax loss carry-forwards to use in the future.
Regardless of the price of an issue, a 30% gain is a 30% gain. If you buy a $30 stock, even if you can only buy 100 shares, and it goes up to $39, that's a 30% gain.
When you buy a higher priced stock, you're getting investor confidence and street coverage for no premium...not bad things. |
