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Investors following the Fire style are accepting higher risk with the goal of attaining higher returns over time. So this approach requires a higher risk tolerance, and the willingness to accept significant volatility in share prices. In October 2019, we also expanded the range of our Fire shares to also include potential recommendations from the US stock market, which tends to include a better variety of âgrowthâ stocks.
We suggest that investors that primarily buy Fire shares should be particularly mindful of diversification in their portfolios. With sufficient diversification investors should still be able benefit from any upside, while limiting the damage to their portfolio when situations donât turn out as we hoped.
We donât consider Fire investing to be gambling or a get-rich-quick scheme, though. We aim to be long-term owners of these businesses and reap the rewards from their success. Our investing time horizon for these shares is measured in years and decades, not weeks and months.
“Itâs cultivated an impressive competitive moat that helps it stand out from its peers, even those with significantly deeper pockets. And the results of this are already being reflected in the staggering level of growth and value creation for shareholders.. “
Zaven Boyrazian, Share Advisor
January’s Fire recommendation:
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The post Just released: January’s high-risk, high-reward stock recommendation [PREMIUM PICKS] appeared first on The Motley Fool UK.
Our analysis has uncovered an incredible value play!
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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