Yielding Wealth | Personal Finance

Why the “WOW” Factor May Not Be Best When Choosing an Investment

by miranda on February 26th, 2008

If you are an investor that goes in for the long-term, and may not be especially keen on the short-term trading, the WOW factor may not be what you are looking for.

In investing terms, stocks with the WOW factor may be seen as “growth stocks.” These are stocks that offer returns that might make you say WOW. These are stocks that beat the market average by a fair margin. But in times like these, with stagflation on the horizon and worries of a recession mounting, WOW can easily turn into something quite the opposite.

When choosing an investment, it is important to look at your personal needs. And it can be a good idea to look at the current economic climate. While now is definitely a good time to buy (remember: “buy low, sell high”), what you choose could make a big difference.

Venerable stocks that have weathered past storms are more likely to make out intact than are WOW stocks that dazzle for a little while before fizzling out. The returns on a long-term investment plan focused on blue chips may not offer sexy returns, but they are more likely to survive the current market troubles.

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