Article Writing Homework Help

Need help with my writing homework on Stock Market Advice. Write a 500 word paper answering; STOCK MARKET Since 1802, stocks have returned an annual average of about 7% after inflation while US treasury bonds have returned about 3%.” —James Glassman (author of Dow 36000) in Stocks are still the best bet,’ The Guardian, May 26, 2003

For the equity markets overall, returns of about 5 percent to 7 percent annually above inflation. This range has been the same for long-term investor for over 100 years and, I suspect, will be the same for many years to come.”

—Scott Evans (Executive Vice President, CREF Investments) in Stock Investing: Take the Long-Term View,’ TIAA-CREF Participant, May 2003.

Investing in the stock market calls for and requires a certain degree of experience and expertise. It is no place for amateurs looking to make a fast buck. Most analysts also advise that investments in the stock market should be made with a long-term perspective of at least five years. Over the long-term minor fluctuations usually average out with each successive peak being higher than the previous one. That said there are several other aspects that need examination before deciding when and where to invest.

Efficient Market Hypothesis postulates that “only fundamental factors, such as profits or dividends ought to affect share prices” (Stock Market). But this is true only in an ideal situation – a perfect market – which is hardly the case. Over shorter periods, there are wide variations in stock prices on account of any number of reasons, some of which are not even technical in nature. The stock market is driven by investor confidence – and that is a matter of personal choice that cannot be predicated. The general mass of investors invests with a ‘herd mentality’. Inexperienced players can rarely, if ever, ‘time the market’ and hence generally incur losses. Warren Buffet has said in his biography that, “…despite all this available information, [analysis, ‘hot’ tips, blogs etc], investors find it increasingly difficult to profit.