Stock prices fluctuate – that’s well known. How much they fluctuate is expressed in terms of volatility. Another word for it is fluctuation, which says very exactly what it is about.

If you want to invest in a company and consider buying shares in shares, then a look at the volatility – or “Vola” for short – is often appropriate .

Decision using the volatility model

With this model you can decide how many shares can be bought. The calculation is based on the fluctuation range of the share. You have to be clear about how much money you are willing to risk per share. Furthermore, it is important to set a stop-loss level, which regulates from when the securities should be sold again, if the price falls.

The next step is to choose an individual period and determine the highest and lowest price of the stock. For stock investments, the period should be rather larger, often at least one month is recommended. But there are also 10 days, as well as 60 days or more. If these two values ​​have been determined, their difference or distance is calculated. ... 

In general, one can distinguish between two types of risk – the systematic risk and the unsystematic risk. A systematic risk is involved in most investments. For example, a significant political event could affect multiple investments in your portfolio. It is almost impossible to protect yourself from this risk.

The unsystematic risk is also called “specific risk”. This type of risk affects only a few investments. An example of this is bad news that has a negative impact on the stock of a particular company – such as a sudden strike.

Risk diversification is the only way to protect yourself from this risk. There are many special risk forms that apply especially to stocks and investments.

Credit or default risk

The credit risk (or default risk) is the risk that a company or individual will not be able to meet financial demands or pay the interest associated with these claims. This type of risk particularly affects investors who have bonds in their portfolios.

Government bonds, and Bunds in particular, have the lowest default risk and the lowest returns, while corporate bonds tend to carry the highest risk of default, but also bring a high return. Low-risk bonds are generally safe investments, while high-risk bonds are considered scrap bonds. ... 

Many investors just look at the price of a stock.

But the market is just what you pay for.

The value is what you get.

For a company whose market value has risen sharply in the past, many consider it expensive, a stock that has fallen for a bargain.

The question must always be: What do I get value for the price?

What is the intrinsic or true value of a company and what price is paid on the stock market for the company? This difference is of great importance to value investors.

Even top companies sometimes have problems.

The stock market then tends to “punish” these companies disproportionately.

These situations have often been very good buying opportunities in the past, because top companies usually overcome their problems and emerge stronger from crises.

It also happens that companies improve their earnings and earnings year after year, but the market ignores the ever-improving starting position.

The stock is thus always cheaper at unchanged price relative to their value.

What do you have to do if you want to trade in the value principles of Buffett, Graham? You need to know what quality means in a company and how you can specifically determine that. ... 

One of the best stock market strategy is to invest in high performance dividend stocks, which means investing in securities that will produce large and growing dividends over time. In order to fully understand the strengths of this strategy, it is essential to understand what type of stocks should be invested, and to fully understand the concept of “cost-efficiency”. We’ll see in this article how a performance-based investment strategy works, what is “cost-efficiency” and how this notion will help you create increasing passive incomes over time, and to conclude we’ll give some examples of the returns that can be obtained after a few years with this strategy.

How to well invest in high performance dividend stocks?

Investing in performance stocks is to choose securities that will pay you more and more each year while increasing in value. If you choose poor quality securities, they will pay you maybe a big dividend today, but it is likely that they will pay you less tomorrow, because if the company is not extremely strong, it won’t be able to clear enough cash to pay dividends due. So it’s important to start by choosing stocks that pay you a reasonable and sustainable dividend in time. If you would like to know more about this topic, I invite you to read the following article explaining where are the best dividend stocks. ... 

Cash flow literally means ‘the flow of cash’. Behind this barbaric term lurks an extremely simple principle: it is simply a sum of money that will return to your pocket at regular intervals. For example if you buy a stock that costs $100 and pays $5 of dividends, your cash flow is $5. If you buy 100 shares, this gives you a cash flow of $500, which return to your pocket without touching your initial capital, and this at regular intervals.

It’s a way to increase your revenue from day 1 of your investment, and it doesn’t matter what kind of investment vehicles used as long as it pays you regularly (shares via dividends, bonds via coupons, real estate via rents). The higher the payment frequency is, the better.

Why do we need to focus on this way of investing?

Because the Cash Flow that goes right back into your pocket can be reused immediately to create a snowball effect.

For example: You buy a property that gives you a positive cash flow of $200 per month. You can use $200 to buy 2 shares at $100 each month which will bring you $5 each. In one year you buy 24 shares, a portfolio of $2400 will pay you itself 24 x 5 = $120 in the first year, that can be used to buy new shares and will bring you interest again. You will understand it allows you to reach interest on interests, which greatly accelerates your enrichment speed. ...