9 Golden Rules of Stock Investing (Rule #3) 9 Golden Rules of Stock Investing (Rule #5)

9 Golden Rules of Stock Investing (Rule #4)

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Rule # 4 : Consider Price to Earning (P/E) ratio and Dividend Yield. The most common measure of valuation is the ratio of price to the earnings per share. This is the PE ratio. A PE of 10 means that the price of a share is 10 times the profits its earns. High-growth companies often have very high PE. The PE tells us how low-priced stock may actually turn out to be expensive.
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