fair price.
When trading fundamental indicators, as known, looking for undervalued or overvalued stocks of companies in the hope that the market, someday everything will put everything in its place according to the purchased tickets and the price of the shares will be as follows, what should be in their opinion and mathematical calculations. Let's omit here the fact that the opinion of an individual stock speculator is quite subjective and he can be wrong. We will assume that he calculated everything correctly and that this is really a fair price for the shares of a certain company.. Lottery tickets have been bought and now it only remains to wait for the moment when everything in the world becomes fair, including the share price. There never was justice, and then once she came — some kind of communism, to each according to need, from each according to his ability — including the stock price suddenly became fair — complete idyll, the wolves made friends with the lambs and they all became brothers and sisters, fairness prevails in financial markets, prices became fair.
Does this happen? Someone will say: `` of course it happens, I recently calculated a fair share price and it settled after a while. ". Naivety. In the process of a random walk of the price over a long period of time, there is a huge probability that someday and `` fair" the price will be set for a while, more than once or twice.
Here, for example, aaii.com monitors various fundamental strategies over the past 15 years. Some are overtaking the SP-500 index, some coincide with him. All strategies have their own rules based on various fundamental indicators and company ratios., there are quite complex formulas from these coefficients. In general, there is room for study — can take months or even years.
All in all, the meaning is — we buy shares under the terms of some strategy and wait until justice prevails and the shares rise in price. It is allowed to wait up to several years in the hope that the fundamental indicators will take, eventually, its own and the share price will rise, where it will be possible to fix the profit.
Isn't it easier to just buy stocks during a rise?, without freezing money for years, ожидая пока stock не пойдет в рост. For example, if the price crossed the moving average from the bottom up, it will mean trying to grow. We buy. Without even knowing its fundamentals, it is clear that if the price rises, then there are reasons for this, and, it doesn't even matter what. Let's explain the reasons later, когда цена вырастет. They might even be respectful..
I know the objections — will cut down on the moving average, we get a bunch of small losses….. и т п. Yes, граалей не бывает. Gaps and small losses can be compared to the loss of months and years when you bought using a fundamental strategy without stops and wait for a fair price, but she's still gone and gone… and even the price falls and falls against the fundamental without stopping.
All in all, It is better to see once than hear a hundred times. You can just check what would happen if you started investing using the moving average, for example, 15 years ago. It is possible to manually spend months testing a portfolio, but you can do this in a specialized program in a few minutes. For example in WealthLab. Я проделал — the results are comparable to the best fundamental strategies on aaii.com. The same drawdowns in bear markets, the same profits in bull markets.
I.e, price (schedule) takes into account all. Maybe, for someone it is unfair, but everything in the world is relative and for the current moment that price is fair, which is at the moment.
