I would pay for 100 shares for my reference company the stock GameStop Corporation (GME). GameStop Corporation’s action includes the selling of video games and PC entertainment software. It sells both the old and the newly developed games and softwares. It also sells accessories and other related products. As of July 2006, there are already 4,592 stores worldwide. The stores are located in the United States, Austria, Australia, Canada, Denmark, Finland, Germany, Italy, Ireland, New Zealand, Norway, Puerto Rico, Spain and others.
It also ventures in online commerce, creating websites such as the gamestop. com and ebgames. com. The corporation also has a magazine circulating in the United States called Game Informer. (“GameStop Corp”, 2007). Being a video gamer myself, I think that the industry of gaming is a good one. People of all ages have a liking towards video games. Although the market of the video gaming industry is mostly men, there are also women becoming interested. Also, GameStop is the biggest seller of the video games and computer merchandise. In one year, I expect the stock to grow higher.
Currently, its price is $33. 59. After one year, I think that the stock’s price will be higher because it has not reached its peak growth. It is also listed as the 7th stock which is expected to have strong growth in the coming 5 years (“Strong Forecasted Growth”, 2007). The stock is not that risky either. Having the price under $40, the possible decrease in the price is not that big. However, the growth in the price of the stock is not that high either. No matter what might happen to the stock price, the effect on the initial investment would not be that great.
Since I am a risk-averse person, who does not want to gamble the chances of the fluctuations of stock prices, a low priced stock is a good choice. If the stock price would fall, by only a little, the shock would not be too much for me. The usual alternative for stock trading is investing the money in the bank. It may be deposited in different accounts such as time deposit, savings deposit and others. On the other hand, the stock trading is the investing of money on the stocks depends on what stock to be invested on.
The only issue at hand is where the returns are higher and if the time spent on waiting for the returns is not too long. In depositing in banks, returns usually range from 1%-5% on an annual basis. Comparing it to stock trading, returns can reach up to 50% of the stock price. However, in depositing the money in banks, the return will surely be positive. There growth of the money is ensured. On the other hand, stock price in stock trading tend to fluctuate. One time the price of the stock will be high but after some time, the price of the stock will fall.
Apparently, no one can accurately predict what is going to happen to the stock prices. Otherwise, there is an illegal transaction going on. The type of person investing should also be considered in making investments. It depends on the willingness of the investors on the conditions of investing. Some people are risk-averse, who do not want to take risks to avoid mishaps and bad things from happening. On the other hand, there are risk takers, the ones who are willing to take risk because of chances of higher returns. As I said earlier, I am a risk-averse person. Also, I am willing to wait for the returns.
If the returns would be higher after sometime, although I have to delay consumption and other factors, it is better for me to wait for the higher returns. It is true that some people cannot wait for such delays and want instant money. In the end, it depends on the person if the person is impatient, who wants returns right away, risk-taker, who is willing to take the chance of having higher returns at the same time ready to take on losses, patient, who is willing to wait for the returns to grow, and the risk-averse who wants to ensure that there will be returns in whatever investment.