A common fallacy in stock market investing is assuming that a good company makes a good investment

A common fallacy in stock market investing is assuming that a good company makes a good investment. Suppose we define a “good company” as one that has experienced rapid growth in the recent past.  Explain the reasons why shares of “good companies” may or may not turn out to be “good investments.”

Total Risk

What constitutes total risk, and how is it measured?  Of the two components of total risk, discuss which one investors can eliminate?  Explain the remaining risk, and how is it measured?

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Shares of companies that have experienced rapid growth in the recent past may turn out to be a good investment because if this rapid growth continues to be experienced in the future, the profits of the company will increase significantly translating to high dividends for investors. The good returns make the shares of that company a good investment. On the other hand, the shares of such good companies may not turn to be……………………….

APA

340 words

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