The term "bargain stock" comes up a lot in a bear (or down) market because it ties in with the buy-low, sell-high philosophy. Bargain-style money managers vary in their buying criteria, but they usually look for companies that they believe are undervalued and are likely to rebound in the future. For example, when the market plummeted in 2008, companies like grocery chains, drugstores and health-care firms were considered good value at reduced stock prices. The strategy behind this type of investing is that, no matter how miserable the economy is, people still have to eat and take care of their health. That said, as thousands of experienced investors have recently learned, you can still lose your shirt or have to wait years to recoup your losses. DIY investors should do their homework, know the price history of a stock and keep a watchful eye on its progress. Indeed, before you sink too much money into a potential bargain, consider enlisting the services of an experienced financial adviser--it's the best route to protecting all of your hard-earned cash.
|< Prev||Next >|