Abstracts » Business

How to avoid stockpicking pitfalls

Article Abstract:

Investors run two kinds of risks when they invest in stocks, risks associated with individual stocks, and those associated with the market as a whole. A capital asset pricing model (CAPM) predicts that market risks are rewarded rather than other factors. Stocks should not be purchased simply because they are expected to rise, or sold because they are likely to fall. Low-risk portfolios geared to reducing risk levels assess stocks on how far they correlate with stocks likely to perform well, and aim to diversify.

United Kingdom, Analysis, Personal finance, Portfolio management

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Fears fuel prices

Article Abstract:

US stock prices dropped in late April 1998 due to concern that interest rates could be raised in May 1998 or later in the year. There is concern that stock price inflation could lead to general inflation rising, and the Federal Reserve may be concerned about an asset bubble. There are doubts that interest rates will be raised. Consumer price inflation is at 1.4% , while producer prices have dropped, so deflation appears to have affected manufacturing industry.

Interest Rates, United States, Inflation (Finance), Inflation (Economics)

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