Book Value: The Chanllenges of Investing in The Stock Market Essay

Book Value: The Chanllenges of Investing in The Stock Market Essay

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The idea of investing in the stock market is at times challenging. Heightened activities witness the stock market itself. These activities gained the investor’s interest increasingly. The stock market patterns have changed due to the current globalization and integration of the subsequent markets. Just to name some of the global markets are New York Stock Market, Hong Kong Stock exchange among others. Sometimes these market patterns have changed due to politico-economic backgrounds (Hamid Faruqee, 2008, p. 154).
The equity valuation ratios as seen from portfolio compare the two shares I traded. This comparison enables me to compare a stock’s per-share price. It has become a major problem to control unnecessary volatility of trade market as seen in portfolio. This has triggered the corporate government to rule out and put in place a process of bringing the patterns to a uniform level. Globally, the economic environment has started taking a paradigm shift with the featured securities. Like for instance, the ‘dot com bubble burst’ and the soaring oil prices. It is very challenging when U.S economy is put into an account (Hamid Faruqee, 2008, p. 265). U.S economy has slowed down making the interest rate appear tightened, and the equation made more complex.
To determine the right shares of my portfolio, I needed to have a conservative alternative. Microsoft appeared to have outstanding price Earnings Ratio in its book value. From portfolio performance, the shares I traded are not that bad. Their PE ratios reflect the book value they had. The expected daily returns from shares have a weighted portfolio exhibit significant to non-linear dependence. Shares from Facebook and Microsoft are mostly consistent with previous mar...

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...s. From the above review, it may be concluded that the presence of abnormal stock returns for several companies like Microsoft is as a result of volatile stock behaviors. Example of these behaviors is the event announcement of dividend. The same abnormal returns are not subjected to all companies like Alnylam pharmaceuticals.
The abnormality of these returns varies from one sector to the other. The significant abnormal returns for many companies indicate the failure of market strategies in use. The comparative qualitative analysis shows that companies have different sector index to the market.

Hamid Faruqee, P. B. (2008). Exchange Rate Volatility, Pricing to Market and Trade Smoothing. London: International Monetary Fund.
subject, S. F. (2014, 03 16). Market Portfolio. Retrieved 03 17, 2014, from Market Watch:

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