You Have To Get In This Market!

The mission here at Wealthy Joe Investing is to inform, educate and inspire the average Joe to begin investing in the stock market.

Little by little, one person at a time, we will get there!

The stock market is a wealth-building machine that most Americans are not a part of.  That must change!!!

The power of compounding your money over decades of being invested is unfathomable to most people.

Is it really possible to turn a $1000 investment into $100,000, or even $1,000,000?

Yes, it is – very positively – if you own the right stock.  No one has a crystal ball and can tell you what stock it will be.  That’s fine!  Listen – save your money, find a company you believe has a bright future, and just do it!

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

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When Is A Stock Too Expensive?

Last year, before the stock market sold off, the prevailing thought among many pundits was that stocks were overvalued.

What makes a stock overvalued is very subjective.

Some analysts look at a stock’s price-to-earnings ratio, also known as the PE ratio.  You take the price and divide it by its earnings per share.  So if a company has a PE of 20, that means that it’s trading at 20 times earnings.

You can also look at something called a price/earnings to growth ratio, or PEG ratio.  A PEG ratio of 1 or less indicates that the stock is undervalued.

Now, I personally use neither of these to decide on my stock selections.  My main concern is the size of the company versus the size of the opportunity.

Amazon (NASDAQ: AMZN), for example has always traded at sky-high PE levels.  As a result, many investors passed on it because it was too expensive.

In 2015, Catherine Wood, the founder of ARK Invest, said that Amazon was a trillion-dollar company because the market opportunity was in the multiple trillions.  Amazon had a market value of $200 billion at the time and its PE was over 100 – insanely expensive by traditional metrics.  However, the stock flirted with a market value of a trillion and I’m confident it will get back there.

Great businesses with incredible growth opportunities will always seem expensive, but don’t let that stop you.

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)