Price-Earnings-Ratio (PER) is a simple and familiar method of valuing a stock among investors. According to Wikipedia’s entry for Alternative Investments, they are an “investment product other than traditional investments such as stocks, bonds, or cash” and that “wine, art and antiques, Broadway shows, movies, indeed any store of value, might also be considered an alternative investment.” Alternative Investments, including Broadway and Off-Broadway shows, are undoubtedly high risk.
While some can’t get their eyes off the stock market rates, others seem to be too intimidated to even try to understand what’s going on. If you’re a beginner in the stock market, there are articles here that will help you understand this world of stocks and shares.
It takes into account the opportunity cost (the minimum acceptable compensation for investing in a risky asset as opposed to a less risky market instrument like government bonds) of the company’s capital investment and measures the excess returns over this charge.
Although I am a firm believer in investing only in dividend paying equities, high dividend stocks are still “growth purpose” investments and they just can’t be expected to generate the kind of income that can be relied upon from their “income purpose” cousins.
The fact is, if you’re an individual of a certain net worth, your traditional financial advisor will probably recommend that you allocate a certain amount of your investment portfolio (usually about 10{29605dee68c1b183c971296e05b1536e8a9cef6d5d48c9b4ef1206285b877a40}) to higher risk instruments, or so-called Alternative Investments, in order to diversify yourself.