Posts Tagged ‘warren buffett’

Bargain stocks, a good deal?

Posted October 24, 2008 by Bernz

Diving stocks are hugely tempting. Despite intense speculation and high hopes of locking in tax benefits. But watch out. Bargain stocks might not be the good deal they seem.

As put by CNBC.com, “You know when Warren Buffett starts buying stocks that we are at least within a 500-mile radius of the bottom”.

When a company is going through bankruptcy its shareholders are the last people to get paid. There is also a chance you might not get paid at all, meaning the stock you hold for that company could be completely worthless. I say “could be” because there is a chance that some pre-existing shareholders will receive some payment, but it’s a major gamble.

Friends, a smarter investment in these tumultuous times could simply be taking better care of what ever new money you have coming in. For instance a reallocation program that adjusts contributions to under-funded areas in your portfolio can keep you from locking yourself in to future losses. Talk to your financial advisor or your employer’s benefits manager about setting up a program that reallocates your new money.

And another thing: diversify. With the risks of having all your eggs placed in one basket, diversification should be among your top investment priorities. I’ve covered a few strategies that lend to automatic diversification. Click here to learn about a common way to instantly diversify your portfolio.


Posted in Investing Basics, Stock Market Investing, Stock Watch | 1 Comment »


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