Comfort Zone Investing: What Is a Stock?

Filed under: Comfort Zone Investing

For many investors, the answer is elusive. They sort of know what a stock is but when pressed they don't fully understand what it is they're buying when they decide to invest. Usually they respond with something like: "I'm buying a company." And that's right. But specifically, here's what they're buying.

When you purchase a stock, you buy two things: a percentage of the Book Value of a company and a percentage of earnings in the future. Let's look at Book Value.

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Comfort Zone Investing: What Is a Stock? originally appeared on BloggingStocks on Sat, 05 Jun 2010 10:30:00 EST. Please see our terms for use of feeds.

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