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Anonymous

22 Apr 2021

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General Investing

How to calculate a fair price valuation ? Heard that staying invested is key so i bought a stock albeit at a reasonably high price and it dipped tremendously afterwards. Feeling a bit regretful now...

Time in the market beats timing the market. However, a good stock at a bad price is still a bad stock. How can i calculate what is considered a fair price to enter the market ?

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Tan Choong Hwee

22 Apr 2021

Solutions Specialist at Providend

Well, a good stock at a bad price is still a good stock. Given enough time, a good stock that suffered temporary setback will still excel in the long run. As an example, have a look at 5-year chart of Apple:

Even if you bought at those highlighted peaks and immediately suffered loses, you still end up positive if you held it till now.

Having said that, of course it is more profitable if we managed to catch all the lows in the stock, but it is very difficult to do that perfectly. However, we can improve the odds by some Stock Valuation Method. You may want to read this article:

https://www.investopedia.com/articles/fundament...

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