4. Look Beyond Price For Real Value

A low priced stock does not necessarily mean it will provide good returns. The face value is not the stocks real value. A stock having a face value of mere 10 may be even costlier in value then the stock having face value of 500. To evaluate if the stock is worth investing into, compare it with similar groups. A stock available at low price only means that it is new in the market. The returns depend only on how the stock performs in the market, which ultimately depends on how the market moves.

5. Consider Inflation While Calculating Returns

Inflation always gives wind to our worries, may it be about price rise in house hold budget or affecting our investment. The blow of inflation on your assortment depends on the type of stock you hold. The rate of inflation is vital as it symbolizes the rate at which the bona fide value of an investment is battered and the loss in spending power over time. Inflation also suggests investors how much of a gain their investments need to make for them to keep up their standard of living.

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