Shareholders have a long-term view of the stock market / 2 required equity strategies in the capital market

According to the economic correspondent of Fars News Agency, the stock market is in a volatile situation. Getting out of this situation requires injecting liquidity into this market, which is in a state of stagnation.

Many shareholders have chosen to exit the stock market and enter other markets. Among the financial markets, the stock exchange was named the worst market in November. This process is being repeated in December, but what should shareholders do in such a situation?

Most market participants believe that shareholders should not make decisions and take emotional actions for their shares in the stock market under the influence of fluctuations in investing in this market.

Long-term view of the stock market; Yes or no?

Both government officials and stock market experts have long spoken of the need for a long-term view of investing in the stock market. The words, of course, are not to the liking of the traders, who have been waiting for 15 months now to change the direction of prices and get out of the losses.

It has been said a lot among shareholders that people should have a long-term view of the capital market. But this was because the stock market had fallen sharply and a large number of shareholders, mostly newcomers, had suffered losses. This view seems to have been proposed as a way to compensate shareholders in the market.

For an investment, strategy can be defined from different angles. Among the strategies in the capital market, time is divided into three periods: short-term, medium-term and long-term, and in terms of investor personality, it is divided into three axes: value-oriented, growth-oriented and volatile. Therefore, in choosing the type of strategy, both strategies should be evaluated.

Does a long-term view of the Iranian capital market work?

A look at the performance of asset markets in the last 4 years shows that the capital market has performed better among other markets. If we go back to the last 4 years, ie from the beginning of 1997 until now, the total index of Tehran Stock Exchange has jumped by 1340%, while competing markets such as coins, dollars and housing have been accompanied by growth of 667, 478 and 4640%, respectively.

By reducing this period to about 3 years, similar results are obtained; Since the beginning of 1998, in the face of a 6,760 percent growth in the stock market, rival markets have, at best, made 190 percent profit from those investors.

Even in the last two years, the stock market has won the asset market. However, given the huge losses of the stock market in the last 15 months, this can not be easily raised; But people who have a long-term view of investing in the stock market always seem to have won.

What should shareholders pay attention to in long-term investment?

Shareholders in long-term investment must first examine the fundamental factor of stock growth in the coming year; If there is no fundamental factor influencing stock growth during this period, it is dangerous for the investor to insist on that stock with the view that the stock will grow in the future.

Proponents of her case have been working to make the actual transcript of this statement available online. In a country where the annual inflation rate averages 40 percent, any kind of investment can be profitable in the long run.

There is an important principle in investing in the stock market that shareholders are not responsible for the growth of companies; Rather, listed companies are tools for people to invest in this market. Usually, long-term shareholders in the capital market build a portfolio of underlying stocks and hold them for a year or more in the hope of reducing losses and profitability.

What is the difference between the stock market and other financial markets?

The most important factor that makes the difference between investing in the stock market and other markets is the duration of investing in this market. The capital market is not a short-term market for a month or two, but a long-term market that shareholders should look at with a medium-term one-year perspective or a three- to five-year long-term market.

One of the issues that is currently facing serious problems for shareholders is the short-term view of the stock market. Some experts believe that if, when we invited everyone in the community to the stock market, such issues were expressed as training for newcomers, we would no longer see the pressure of emotional buying and selling lines from shareholders, and perhaps the capital market as well. This day did not fall.

Another difference between the capital market and other markets is that the capital market is productive. At times, corporate stocks may be below or below their intrinsic value, since the capital market is a productive market in which companies are constantly producing and providing services. They are busy, naturally buying corporate stocks in any situation, even if it is a bit higher than the intrinsic value (and buyers make a valuation error in this regard), still has positive results in the long run.

Almost no other market can compete with the stock market in this regard. Of course, the profitability of companies and the continuity of their activities and being fundamentally valuable is also an important condition in this regard.

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