Whats The Right Stock Price?
Price plays a determining factor in qualitative cost risk assessment. Bottom line: what is the right place to buy that lowers risk?
The longer a certain stock has rallied continuously, the more likely institutional holders look to take profit (i.e. sell) before the bearish period commences, or perhaps they know something that the public does not. Of course they need chumps to provide liquidity and buy off them, the role usually played by the general public; this is where the financial advisers and brokers do their magic and sell the "risk-free" sentiment, where "Of course it’ll go up!"
Risk of General Volatility Even In Bullish Periods
Prices do not move in nice smoothed curves, but rather ugly zigzags as result of constant quasi-auction based trading on the exchange floors. Even in a bull market, the general fluctuations occur and the simple attitude of ignoring this risk and "focus on the far horizon" typically ends in mediocre or terrible performance.