For several years until recently, many investors poured lots of money into the growth stocks.  The last time I looked at the stock prices of many growth companies, the prices had fallen to anywhere from $6.00 to $1.50 a share.  Since I am a programmer, I have automated the generation of security analysis for more than 6,000 publicly traded companies.  I have my security analysis files from a year ago (It’s one file per company).  Many of these growth companies were trading at above $10 to $15 a share then.  Surprisingly, they are being traded at less than $6 and even less than $3 a share now.

In the securities market, a value investment mostly refers to buying the stock of a profitable publicly traded company — usually at a lower price than what the stock is worth.  But the problem is that value investment is not always in favor for the investors and traders on Wall Street.  Just a few years ago, growth investment was in favor.  A growth investment is when the investor believes, for some real or imaginary reason, a company’s stock price will go up in future, even though the company may be incurring losses year after year.

Value investment is the one thing that has stayed the course for the investors so that the value of their assets will be preserved in good and bad times.  This doesn’t mean we shouldn’t invest in growth companies, and depending on many factors, we should invest in profitable growth companies.  A small company can be a growth company. 

My example is that if you wanted to buy a gas station from a private owner, will you buy a gas station that has a track record of losing money year after year?  Of course not.  With the same token, we shouldn’t buy the stock of a company which incurs losses, and even worse, the company is able and willing to generate extra cash for their spendings by selling new shares on Wall Street while this company had already gone public.  Believe it or not, I know of one pharmaceutical company that has done both – This is according to their annual financial statements which are public records. 

I am no attorney (I do have an ABA-approved paralegal certificate from The University of La Verne).  We know what I should be called if I represented myself in the court law.  I am not a dentist, so I must go to a good dentist for my dental work.  Investors who trade with their gut feelings, beliefs, or what they know of a company can really be risking their assets in the stock market.  Many of these investors and traders are in negative today.  Economic changes, Federal Reserve’s monetary policies, and U.S. government’s fiscal policies can affect the fate of their investments.  For example, when the Federal Reserve raises interest rates to fight inflation, the stock market along with their investments may go down.

Finally, do you need a money manager to manage your money in the stock market?  I can help.  My practice is all about asset management for my clients (alongside with investment consultation and helping people).  We would need to sign an investment advisory contract.  You are welcome to call me, and we can discuss this further.