10 STOCK MARKET MYTHS THAT HURT INVESTORS
5 October 2009 by Cullen Roche
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On the back of a recent Bloomberg interview with John Dorfman I am pointing out Dorfman’s 10 market myths that bedevil investors:
- Myth No. 1: The best companies make the best stocks. Stocks advance when a company exceeds prevailing expectations. The best companies usually generate lofty hopes among investors, which are hard to exceed.
- Myth No. 2: In today’s volatile markets, one must be an active trader.
- Myth No. 3: Analysts are a good guide to picking stocks.
- Myth No. 4: Beware of October, the killer month for stocks.
- Myth No. 5: You can count on the U.S. presidential cycle to predict the market.
- Myth No. 6: Price-to-earnings ratios are the perfect measure of a stock’s value.
- Myth No. 7: Stocks should be bought when they have momentum.
- Myth No. 8: War is good for the stock market.
- Myth No. 9: The market prefers Republicans.
- Myth No. 10: Market timing can greatly enhance your returns.
