In the stock market, investors often hear the word "reinstatement", but many people have limited understanding of this concept. Restoration, also known as "dividend adjustment", refers to the adjustment of stock prices to reflect factors that affect stock prices such as company dividends, share grants, and rights issues. The purpose of reinstatement is to provide a fair and accurate reference to help investors better analyze and compare the historical performance of stocks.
Two forms of reinstatement
There are two main forms of reinstatement: pre-reinstatement and post-reinstatement. Pre-restoration is to adjust historical data to the current price level based on the current pricezyngapokerfreechips2021; Post-restoration is based on historical prices and adjusts the current price to historical price levels.
Application of pre-restoration rights
In actual stock analysis, pre-reinstatement is more favored by investors. It can help investors understand the cumulative increase in stocks from the past to the present, regardless of factors such as dividends and share donations. For example, if the cumulative increase of a stock over the past ten years is 200% under the previous reinstatement, this means that the stock price has tripled in the past ten years.
Application of post-restoration rights
Post-reinstatement rights are usually used to calculate the compound growth rate of stocks or dividend reinvestment income. Through post-reinstatement, investors can more clearly see the actual situation of stock price changes and the contribution of dividend reinvestment to stock returns.
The role of reinstatement in stock analysis
The role of reinstatement in stock analysis is crucial. Here are a few key points:
The role of reinstatement explains historical price comparison Through reinstatement, investors can compare the prices of stocks in different time periods and understand their historical performance. Removing the impact of market fluctuations and reinstatement can help investors eliminate the impact of market fluctuations on stock prices and more accurately assess the company's fundamentals. Dividend reinvestment analysis and reinstatement allows investors to analyze the long-term benefits of dividend reinvestment strategies and provide a basis for investment decisions. Accuracy of technical analysis When conducting technical analysis, reinstatement can ensure the continuity and accuracy of the chart and help investors make smarter trading decisions.conclusion
Mastering the concept and application of reinstatement is crucial for investors, especially long-term investors. Not only does it help investors more accurately analyze and compare the long-term performance of stocks, it also ensures that they have more comprehensive information when making investment decisions.