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Picking stocks: Research vs Hunches

Investors go to great lengths so that they can predict the future of a stock and also analyze the present performance. Sometimes they end up making just what someone else would make that came in and said "I have a feeling about this company". If we could truly predict stock price, that would change the whole nature of the market. Do you think investors that go to this length usually will end up with a strong portfolio with high returns? Why or why not?

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If investors consistently look at stocks as described, and had a well diversified portfolio (as well as selling their stocks at opportune times), they could make profits and have more stock valuation gains then their counterparts who rely on hunches. However, this pre-described information and gains would be based on averages over a period of many years. And no matter what, there will be some bad years because of things like wars, natural disasters and ...

Solution Summary

This solution discusses in depth the possibility and probability of consistent high returns from stock picking through detailed research, analysis and market timing. Also global economic factors are also weighed in on.