It is very likely that given the global events of last week markets are likely to be volatile. So, two things which one should be mindful of before taking any buying decision. First, given the broader picture of global markets, be ready for some more correction. Second, don't buy stocks because they look relatively cheap compared to the recent past and that too based on a single ratio which is the price earning ratio. Rather it would be better to use PEG ratio. One of the ways is to determine by dividing a company’s PE multiple with its growth rate. ( see the example ) By focusing on the PEG ratio, investors can better differentiate between genuinely valuable growth opportunities and those stocks that appear cheap but are cheap for a reason.
