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Stock Strategist

Long-Term Investing vs. the Hot Product

Temper your excitement with real-world expectations.

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We analyze all kinds of companies to find opportunities for the long-term investor. One category that can be a challenge sometimes is the firm with a hot product on its hands. The product is usually something new that is generating a lot of hype and excitement. Soon enough all the "cool" people have the item and the sky's the limit on the new opportunity.

With excitement comes risk, however, as stock prices shoot up and attract investors at the peak of expectations. Then the realities of the marketplace hit. Some investors get caught at the top, unaware of the white-knuckle ride back down that will soon commence.

Rod Bare does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.