Stocks Intermediate: 20 Stock-Investing Tips

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1.
When owning a stock, you should evaluate its price relative to the price you paid for it.
Choose wisely. There is only one correct answer.
False. The price you paid for it isnt very relevant. What is relevant for evaluating a stocks price is the estimated value of future cash flows.
2.
What sort of expectation should a stock investor have regarding success?
Choose wisely. There is only one correct answer.
Success should be something you are willing to wait for. Even though stocks have historically returned in the 10% range, you must still have patience when investing in them. If you expect to get rich quickly, you will most likely be disappointed, and you may find yourself drawn to speculating, which is very volatile.
3.
Being a stubborn investor will always pay off.
Choose wisely. There is only one correct answer.
False. Often, being stubborn will lead to losses. If youre holding a stock whose company is foundering, it may not be wise to hold onto it.
4.
The stock of a company that is in great shape financially will always be priced accurately.
Choose wisely. There is only one correct answer.
False. Though that is the ideal, a stocks price is sometimes higher or lower than what is accurate (that is, what its book value is).
5.
Past performance is sometimes a good _______ of future results.
Choose wisely. There is only one correct answer.
Indicator. Though past performance is not a guarantee of future results, it can still be a good indicator of good results. Still, do your homework.