Investing in Stocks
Investment decisions are some of the toughest choices that an individual has to make. The risk involved in any investment plays a significant role in the decision-making process, although several other factors are considered. Factors such as the history and performance of a company lead investors into making crucial investment decisions most of the time. The General Electric ® and Coca Cola ® are some of the stocks to consider in a situation involving an investment decision given the history and expectations associated with the stocks.
The Coca Cola Company and General Electric have been steadily performing over the past years. Coca-cola is specifically one of the steadiest performers in the past ten years, with the company appearing in the Forbes’ list of the top ten most valuable brands in 2018 (Sim & Wright, 2017). The risk associated with a company such as Coca-cola is low since market factors may not be severe, given the fact that the company is already established.
On the other side, General Electric may have been a steady performer in the past, but the expected turn-around is a factor to go by if a decision is to be made. General Electric has been associated with positive news in the recent past, offering hope for a better future in terms of stock growth. Therefore, a decision to invest in General Electric will be worth the risk since the stock is currently low, and the yield is expected to go up. However, money markets are associated with high volatility, and thus, any investment is a choice to take a risk.
The performance of the Coca Cola stock and General Electric in the past quarter may have been quite below expectations. However, the stocks have not been exempted from the good news that should give investors a reason to go by the choice. The General Electric stock has shown an improvement in the previous quarter showing signs of a better future (Atsalakis, Protopapadakis & Valavanis, 2016). Additionally, the news surrounding the General Electric company is nothing but the best, and therefore, investors should be ready for a rise. For example, the chance to win a contract with the US department of defense is good news for every investor because the company is finally on track for success. On the other hand, Coca Cola stock may have underperformed in the previous quarter. However, the fact that Coca Cola has remained steady for several years should give investors the hope that the underperformance was normal volatility associated with stocks.
Investing in stocks is a risky venture, although the returns may well be high. Investing in Coca Cola has the risk that the previous drop in the share value may mean the beginning of a long-term fall in the share price. Also, General Electric stocks may be showing improved performance for a short term with the investors waiting for a disastrous future.
In sum, investing in stocks has no specific way of beating risk. However, the stocks with a history of performance should on top of the list for an investor. General Electric ® and Coca Cola ® are some of the stocks to consider in a situation involving an investment decision given the history and expectations associated with the stocks. However, investors should be aware that the stocks risky and investment should be done with the money that can be lost.
References
Atsalakis, G. S., Protopapadakis, E. E., & Valavanis, K. P. (2016). Stock trend forecasting in turbulent market periods using neuro-fuzzy systems. Operational Research, 16(2), 245- 269.
Sim, T., & Wright, R. H. (2017). Stock valuation using the dividend discount model: An internal rate of return Approach. In Growing Presence of Real Options in Global Financial Markets (pp. 19-32). Emerald Publishing Limited.