Question

In your own words describe what is stock valuation, when you use it.

Answer 1

Stock valuation is method of calculating theoretical value of stocks. This method is used to predict the future market value of stocks and thus helped to get profit from price movements. As per stock valuation stocks which are undervalued are bought and stock which are overvalued are sold. In this method we expect that undervalued stocks will overall rise in value in future that's why we buy it and in same way overvalued stocks will decrease in value hence we sold it.