I think it depends on whether you want stable long term profits or a little more volatile short term profits. If I wanna make money QUICK, then I'll definitely go with undervalued stocks. Likewise if I'm feeling rich and want to invest in *the future* then definitely potential growth stocks.
i buy anything when i speculatete a growth and sell when i speculate a sell. I buy any financial asset when i speculate a growth. I use the long term (about 10 years or more) technical charts to pick good performing historical companies. I then i buy them whenever they drop on mid term and are just about recovering their true historical trend if it has no undesirable news or market situation. Its really easy, logical and less risky trading this way. I dont hold for too long before taking or locking my profits and its a method that works very effectively.
Either are good ways to go. You want a stock that has some upside. Obviously you're trying to make money so you would want something that is going to increase in value over time. I think it's harder to pick out a stock that is undervalued than it is to eye something that has a lot of potential in growth, or a young stock in a thriving sector of the economy. You've got to be well informed and have your finger on the pulse of the over all economy to come out a big winner.
Potential growth is the way to go. It's MUCH easier to see which companies are on the verge of massive growth rather than which stocks are under-valued.
I would go for Warren Buffet's tip of buying the more expensive stocks which can potentially earn big in the long run because of their already established name than buying cheaper stocks which don't actually guarantee even an ROI. You may even end up losing more on the cheaper stocks than gaining.
Buffett actually does buy good companies when they are relatively "cheap" - he's a classic value investor. One common mistake novices make is to confuse "cheap" relative to earnings with a low sticker price. Stocks trading at $50 or $200 a share or whatever are "cheap" relative to earnings if they have single digit PE ratios, for example. While stocks trading in single digits or even under $1 are NOT cheap if they have no earnings or very little earnings and relatively high PE ratios. Not that PE ratios are the be-all end-all of investing, but that's generally a good place to start looking.
I think it's pretty hard to make out as an investor if you don't learn the companies market. Yes, the stock charts and basics may say that the stock is a good deal but is that only because there are rough times ahead? Or is the speculation of rough times ahead likely wrong, allowing you to buy at a deal... That's the most important part.
I am new in business, i would like to know the best thing to prepared. But for, It much easier to me to have a potential growth! It can be a great choice to make us satisfy.
