In many valuations, the ‘Golden Rule’ is being broken. Earnings growth is assuming the sort of strong economic activity that would trigger higher interest rates, yet investors are delinking the two.
Tag Archives | fundamentals
Investors chasing high yielding stocks without considering the fundamentals risk falling into the ‘income trap’, where weak businesses are eventually forced to reduce their dividends.
An investor’s fundamental investment process should be adapted to take account of the psychology and emotion involved in making such decisions, including a disciplined approach to entering and exiting positions.