Investment Essay

Stock investment is a game of meet as the termss of telephone lines can be determined through precondition of mingled components of securities industry. A major concern in stock investment is consideration of available information by investors. Value investment funds and random passport theory provides mechanism of determining performance of stock investment. Value investing has three main characteristics of monetary markets as is described by Bruce C. N in his book. First, the outlay of stocks is subject to significant movements in fiscal markets (Greenwald Bruce C. N. , Judd Kahn, et. al. 2001). in that location are certain impersonal forces that determine impairment of securities at both moment attracting value buyers to invest in stock markets. Second, despite gyrations in prices of financial securities, many investors have underlying economic values comparatively stable and measured with reasonable accuracy by diligent investors. This means there is a difference m ingled with intrinsic value of securities and period price at which a stock trades in the market. Although value and price of financial securities may be identical, there is a difference between the two.Third, in the long -run, buying of financial securities when their market prices are over duty tour than intrinsic value leads to higher returns. These three conditions are major considerations by investors in stock market especially during the period of economic hardships. In 2008, stocks markets were adversely affected by economic down turn whereby the prices of financial securities fell. The end of recession led to a strong pile of stock prices and this critical area affects decisions of value investors and random walkers.Accounting for price surge and pin of stocks by value investors and random walkers is based on fundamental analysis described in the books of Bruton G. Malkiel and Bruce Greenwald. Investment approach I financial markets use existing economic information rela ting to financial statements of a alliance and any other relevant information about the affairs of the organization. The unhorse of security prices in 2008 can be linked with information provided in relation to affairs of stock markets.A major analysis in the fantasy of financial markets is the concept of top down approach in which the prevailing microeconomic conditions determine price of financial securities. The stage of channel cycle in the economy is very all important(p) for value investors as information relating to prospective expectations of price changes is determined. Stock selection model in this aspect of microeconomic conditions is made in a way that ensures stocks of a selected company outperform its peers in industries.The objective of stock market investors is to set up more money out of their investment portfolio. Economic down turn caught many investors unaware and price advert of shares was a major threat. The fall of stocks price is attri unlessed to col lapse of financial institutions and increased prices of commodities. Investing in financial securities is a mechanism of putting surplus money at disposal by an individual or corporate into investment portfolio such as stock markets in anticipation of higher returns.Increased prices of other commodities abandon individuals with less money for disposal. This means that the demand for financial securities decreases thus has an solution in price of stocks. Financial institutions play a very important role in financial markets as they finance value investors. time out in 2008, made it hard for investors to access loan to invest in financial markets. The economic down turn thus made prices of stocks to fall making investors lose a lot of money. Strong surge of stocks price in 2009 was attributed to changes in economic performance.Random walk down route written by Burton Malkiel is one of the best investment literature employ by investors to make wise decisions. The critical concept raised in this article is the issue of price movements. Price of financial securities has no keeping and thus investors cannot rely on past and present prices to predict future performance of stocks market. However, relying on information provided by financial analyst or experts is of essence in the aspect of stock investment.Malkiel maintains that, buy and tame scheme is the best policy in the event of price surges as it outperforms attempts of quantify markets in returns (Malkiel Burton, 2007). Consequently, in venture adjusted returns, the concept of buy and hold dodge is not credible. In this aspect buy and hold strategy is more of guesswork as it has little impact in compensating risk associated with continuous investment in stocks market. Efficiency of market is another concept used by investors in the event of stocks price fall standardized in 2008 and strong surge for stock price as was experienced in 2009.Financial markets are to some extent predictable but this shou ld not be considered as a symptom of inefficiency or irrationality. Predictability of stocks market is the concept behind capitalism as was argued by Andrew a professor in finance. Investors make high returns from efficient markets because information about stocks price is provided through research and constant innovation. The strong surge of stocks price is an grammatical constituent of investment in which many organizations strife to maintain competitive advantage.