Investing in the stock market may sound scary to some but for many, it has made them very, very rich. There are inherent risks involved, but without risk you can’t have a large reward. In order to create wealth, you must educate yourself and follow guidelines and indicators that will provide you vital information about the health of a company.
If you are an investor, you will consider a variety of indicators in order to make your purchase decisions. Among these indicators are the 52 week high and the 52 week low factor of a given stock.
The 52 week high and the 52 week low factor of a stock refers to the highest and lowest points at which the stock was traded within the last 12 months or 52 weeks. Investors find this indicator important because it helps to determine the stock’s current value and helps them to predict a trend in the way the stock may perform moving forward.
A lot of stock traders are using a popular strategy of purchasing companies that are hitting new highs in their stock price. Value investors may choose to purchase a stock trading at a 52-week low as a stock that has been traded and is sitting at a price that is lower than its inherent value. However, a skilled value investor would conduct a more thorough analysis before making a large stock purchase.