- This article is a warning for novice investors and a reminder for experts.
- When investing, nothing can be taken as a certainty as all are moving parts, especially financial metrics and prices.
- Comparing current prices to past prices doesn’t help much, while understanding the fundamentals does.
Investing shouldn’t be a comparative profession, but that is exactly what we do. We try to find the best stocks by comparing one to others, the best financial vehicle for our investments by comparing the options available, or we compare current prices with those of the past.
Unfortunately, comparative analysis more often than not gives us poor risk-reward assessments. In this article, we’ll discuss the pitfalls of comparative investing and what can be done to avoid making unnecessary mistakes. More →