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Stock and market discussion

Stock and market discussion

Question Description

I’m working on a finance discussion question and need an explanation and answer to help me learn.

1. EMH or Behavioral Finance?

The debate between two camps, EMH and Behavioral Finance, has been going on for decades. The pioneers of the two camps, Eugene Fama and Robert Shiller, were awarded the Nobel Prize in Economics in the same year 2013, and the debate about the pillar of finance goes on

Watch Video https://www.youtube.com/watch?v=KrhaOyhZDZk, and have a discussion and debate among you:

a. Which part of the video shed some fresh light upon you? Why?

b. Which camp are you leaning towards and your reasoning?

2. Dollar Cost Averaging

Go to https://www.cnbc.com/2022/01/28/worlds-richest-people-have-lost-money-in-2022-except-warren-buffett.html and read the article.

a. What are some of Buffet’s investment strategies that allowed him to weather market downturns?

b. How can P/E ratio help investors identify value vs. growth stock? 

c. Buffet recommended the S&P500 Index fund for a diversified portfolio. Do you think the S&P500 index fund is well-diversified? Why or why not?

d. The article quoted Buffet, “Consistently buy an S&P 500 low-cost index fund,…Keep buying it through thick and thin, and especially through thin.” The concept of Dollar-Cost Averaging is a very important investment strategy. Search about dollar-cost averaging, and give an example of investing using dollar-cost averaging. 

f. How do you apply the dollar-cost averaging strategy into investing in the current stock market, which is volatile and bearish?