investing guide

Stock Prices

Stock prices can sometimes be the driving force behind an investors decision. The problem is that some investors will buy cheaper stocks simply because they can buy more shares of the cheaper stock.

This can be a problem because an investor who bases their decision on stock prices alone may be very disappointed with their returns.

This is because while you may be able to buy more shares of a less expensive stock; that less expensive stock may perform terribly compared to a higher priced stock. So even though you can own more shares of a cheaper stock you need to remember that cheaper stocks are usually cheaper for a reason.

So you may be better off owning fewer shares of a higher priced stock than a lot of shares of a cheaper stock. Think of it as you get what you pay for.