Hello,
Buying and selling on the stock market can give you gains and losses, but
it is not until you sell some of your share holdings that you either, make a loss or make a prophet, on that stock, from selling when trading on the volatility of the stock market.
Stability is what is required if we are to trade on the stock market and what we should seek when considering the share market.
The pandemic last year caused a lot of panic selling of shares, however, the fundamentals underlining the stock, which lost money, was still strong and patience is required. The fundamentals of a good stock holding is, does it provide a relatively good return each year on the value of the stock. Is the percentage return on the value of the stock greater than the fundamental bank interest one can get from a bank or government bond.
This is what has happened to the stock value my wife holds: -
View attachment 13754
Over a two month period last year it lost 45% of its value and, since it bottomed out at the end of the first quarter of 2020, it has steadily rise in value to where at this present time it has recovered in value where it is only around 8% lower than the peak in the graph which occurred around the end of January 2020.
The percentage Share Price values of the past year or so, is shown in the chart below: -
View attachment 13757
Knowing the story of each stock holding is important. Stock 1 has fallen because of the world trade situation and China flexing its trading muscle, Stock 2 has fallen badly at this present time but it will recover as its investments in new plant comes on line. Stock 3 is an exporter of raw materials, and China is its biggest market. Stock 4 is an exploration company and its recover was linked to favourable government decisions which will allow the company to extract CSG from its mining leases. Stock 5 is a struggling company created by Stock 3 when it was split off from the stock 3 company. It has not performed well and as can be seen, its share price is recovering from the impact of the pandemic of early last year.
At the present time the property market in my country is where the "smart" money is flowing to out of the Share market, as it showing a better return than the stock market and people are borrowing from the banks at historical low interest rates to buy property in the hope of making money in the years to come from capital gains. But the gains being made in one part of the country, may be balanced by the losses being made in another part of the country as people move out of one state to another because of the perceived better lifestyle that can be had in the other state than the one they are presently living in.
In housing the fundamental value of a house is what people are prepared to pay for a property to acquire it. Now the fundamental value of a home never changes, it is a house where a family resides for a part of their life. What changes is how much people are "prepared to devalue" their money by, by paying an inflated price for the respective properties brought.
The property market is driving inflation up and this is being reflected in the cost of living. The pandemic is costing the people dearly in that the cost of food has risen because willing workers are difficult to find.
As is being suggested in this thread, money can be made is the commodity supply and demand markets, but ethics leaves the building up of the nation for its own good.
Shalom
