Is AFRM Stock a Solid Long Term Investment?

Affirm

These days, trying to find a way to support your retirement or supplement the cost of an education can be a real challenge. That is especially true when you’re talking about investing in the stock market. It’s not like these types of investments have ever been a sure thing, but the stock market seems like it’s only gotten more volatile with each passing year and it seems like that has been happening for some time now. One of the best ways to get that money for your retirement or your child’s college fund is to make solid long-term investments that can be cashed in at just the right time. The question is, how do you know when a certain stock is a good option for such an investment as opposed to when you should just leave the matter alone? It’s not always easy to tell, so the best thing you can do is follow the advice of numerous stock market experts, carefully consider the potential payday along with the amount of money you will have to spend in order to purchase the stock, and decide whether or not you can affordably cut your losses if things don’t work out. If you’re wondering about current stocks that might potentially be a good option, you may want to consider Affirm Holdings, traded publicly on the stock market as AFRM.

About Affirm Holdings

Affirm Holdings has been in business since 2012 and they’re based in San Francisco, California. If you’re not yet familiar with the company, they exist for the sole purpose of providing installment loans to individuals for a variety of different needs. You might think of them in much the same way as you would think of Sun Loans, Cash USA or other companies that operate with a similar business model. As you can imagine, these types of companies that offer installment loans to individuals who may or may not be able to get a traditional loan tend to do a lot of business, especially in an economy where people are struggling to make ends meet. As a result, they typically have a fairly secure business model because there is no shortage of individuals that are coming in on a daily basis and requesting new loans. It’s also worth noting that these types of companies typically charge extremely high interest rates. In fact, they can charge anywhere from 180% all the way up to 300%, meaning that they’re making everything they’ve lent a consumer back and then some. When you stop and do the math, it’s obvious that the company can make two to three times the amount they have loaned a person back in interest. Of course, there are some customers who are unable to pay their loans back in a timely manner, but these types of companies still have a tendency to make money. In fact , they tend to make even more money when the economy isn’t doing so well and the majority of people are struggling to make ends meet. That means that the company may be a good option for a long-term stock option because there is little doubt that they will be in business (and going strong) for a number of years to come.

Volatility Has Become the Standard

It almost seems like volatility in the stock market has become the norm as opposed to being the exception. That has certainly been the case with this particular stock. In the course of just a few days, it took a nosedive of more than 15%, then rose sharply again, only to go back down before recovering. It’s not at all uncommon to see a great deal of volatility in the stock market, but it’s also not as common to see quite as much volatility with a particular stock as has been demonstrated with this one. The company has proven that they have staying power and they’ve been in the market for some time, yet this stock has been fluctuating wildly even when the stock market as a whole has remained relatively stable. During the times when the entire market seemed to be jumping all over the place, this particular stock performed even worse. That doesn’t necessarily mean that you shouldn’t consider it as a long-term option, but it certainly is cause for concern.

Understanding the Quarters

While nothing seems to stay the same in the stock market, there is some good news associated with this particular stock. For starters, they have a lot more money now than they had throughout the last quarter, 55% more to be exact. In addition, they also made more money this year compared to one year ago. Many stock market experts considered them a solid option for a long-term stock back then and they consider them to be even more so now.

How Much Will It All Cost?

This past November, you would have had to pay $168 per share if you wanted to get your hands on this stock. Right now, you can buy it for $100 per share. That’s still a significant amount of money, especially if you plan on buying several shares (which is the whole point of buying enough long-term stock to get the job done). However, many of the same stock market experts who believed that you should have purchased the stock as a long-term investment a year ago now believe that you should snatch up as many shares of the stock as you can right now, before it goes up and you end up paying more than ever for it. Granted, there is some risk involved. It’s still expensive and even if the value of the stock doubles, you’ll have to buy several shares in order to make enough profit for it to make any appreciable difference. When you look at things from that perspective, it might make you a little apprehensive about the idea of buying so many shares (or spending the amount of money you need to spend in order to make it all work). However, there is also a chance that the stock could end up being worth four or even five times as much and that could net you a significant payday, even if you only splurge for ten or so shares.

Sliding Value

It’s also worth noting that the stock has been in a bit of a slump lately. In fact, it has been sliding in the stock market for some time now. That fact alone may be enough to make you wonder whether or not there is any point to even considering the possibility of buying this stock as a long-term option. That said, there are plenty of experts that feel like it actually sets up the stock for a prime pay day. There is no doubt that its value has slid for several months now. In addition, it’s a bit frightening to realize that it’s lost a little more than 70% of its value when compared to its highest value this past year. By the way, that value was just over $145 during the early part of last summer. Since then, it’s been steadily decreasing. That said, it does make some investors nervous because there is always the possibility that it will continue to decrease, at least for the foreseeable future. Does that mean that you shouldn’t even consider buying it as a long-term investment? Not really. In fact, it means that you have what may be a rare opportunity- there is a chance for you to get the stock for less than you would have paid for it at any other time this year. Considering the fact that the company is practically guaranteed a solid financial future, you can almost bet that the stock will eventually rebound in a big way. When it does, you could stand to make a lot of money by cashing out and selling your stock at just the right time.

Not All Experts Agree

Of course, there is no way that all stock market experts are ever going to agree about whether or not you should purchase a single stock as a long-term option. That is certainly the case here. As a matter of fact, there are some experts who believe that you should look at other stocks as opposed to this one when you are thinking about buying something as a long-term investment. That’s largely because it’s been underperforming for so long. While some experts think that you should jump at the chance to purchase the stock while you can for a discounted price and then wait for it to rebound before you sell, others feel like it’s still too pricey and that the risk is just too great. They’re not really debating whether or not you can make a profit, because it’s as guaranteed as any stock ever gets that you will eventually be able to sell it for a profit. That said, there are absolutely no guarantees that you will be able to sell for a big enough profit for it to be worth the amount of money you would have to spend right now to get more than a couple of shares. If you’re spending $100 per share and you buy 10 shares, you’re going to have to spend $1,000. If the stock doubles somewhere down the road, you can sell it, but you’re only going to make $2,000 off of the deal. That leaves you with a net profit of $1,000. A lot of stock market experts simply don’t believe that it’s worth the risk for that amount of money. Furthermore, you would have to spend $20,000 or even $30,000 in order to purchase enough shares for you to enjoy a significant payday unless you want to hold on to the stock until it increases by four or five times its current worth. There are no guarantees that it will ever do that and that is precisely what has some experts and investors alike concerned.

Considering the Nature of the Company Itself

When you get down to the nuts and bolts of it all, you have to consider the nature of the company itself and not just its performance on the stock market. Remember, the company has been in business for almost 10 years now. During that time, they’ve seen a lot of quarters where they turned an exceptional profit, but they’ve also seen a great deal of fluctuation in the value of their stock. That said, the company itself has a solid business model and operates in a niche where it’s almost guaranteed to have customers come again and again, at least for the foreseeable future. When the economy is good and people can get loans easier, these types of businesses actually tend to see fewer customers. When it’s in turmoil, they have more customers than they know what to do with because people are trying to get loans to cover their expenses and they don’t always qualify for any other options. In addition, this particular company markets itself as an alternative to credit cards, something that is becoming increasingly attractive as the interest rates on most credit cards continue to go up along with annual fees. That said, people that plan on taking out a loan with the company need to realize that they will likely be paying a much higher interest rate here as well. If you’re not afraid of spending some serious cash, then this might be a good option for you. On the other hand, you may not be too keen on the idea of spending so much money in order to purchase shares of this stock for the long term. It really depends on how much you want to spend right now, the amount of money you hope to make in the future, and how long you’re willing to wait.

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