Financial Stocks – Buy or Not?

August 4th, 2008

Many Yalicoo competitors have benefitted from the recent rebound of the financial stocks. However, the massive selling atmosphere hasn’t changed dramatically yet. The question of whether you should currently buy financial stocks is still under debate.

On the buy side you can find ANDREW BARY from BARRON’S, who sees a “once-in-a-generation opportunity” and suggests that you start cashing into the financial stocks. The following video says it all.

On the other side, Aaron Task from techTicker thinks you should avoid individual financial stocks but get some exposure to the financial sector via a large-cap value index, like the S&P Barra Large-Cap Value Index or iShares Russell 1000 Value Index.

I don’t have the right answer for you in this case. Financial companies are very complicated to evaluate, so I usually prefer to avoid holding them. The current financial sector situation is even more ambiguous than ever. In any case, remember Warren Buffett’s words that “It’s better to be approximately right than precisely wrong”; so if you do choose to ‘cash into’ these stocks, it’s probably wiser to build your position gradually and check the financials of your picks between the buys.

Last 5 posts by Yinon Arieli

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Entry Filed under: Stock Trading Investing strategies