The Dangers of Investing in Risky FAANG Stocks without Financial Knowledge

The novice investors always prefer to follow the performance of big shots in the stock market in order to direct their next step on the stock business. FAANG stocks means the five big names in the stock business like Facebook , Apple , Amazon , Netflix and Alphabet, investors follow the trend set by these stock tycoons.

But to understand the FAANG stock moves, some financial knowhow is always required. Still it is very difficult to follow these FAANG stocks because their moves are always risky and they require lot of courage and strong financial background. We can take the example of Facebook stock trade followers because this stock giant crashed in the second quarter earnings and the reason behind that was slow user growth and increasing expenses.

Similarly, another component of FAANG stock, Apple . hit the sweet spot of approximate $1 trillion at the beginning of August 2018 sets an example for the new investors to invest in Apple ’s stock. Apple is the very first US publically traded company that leaves footprints for the novice investors and gives a lesson about how to invest in the stock business. Sometimes the investors after viewing a recent boom of any company in the stock market just focus the recent trends of that company and decide to invest there. They have no idea that these companies’ hit a bang just by chance and they should not be followed blindly. Rather a deep knowledge about the changing trends in stock market should be gained before investing in this business.