Comments on: Investing Basics: Stock, Stock Market, and Stock Market Index

By: Pinyo

Pinyo — Mon, 15 Sep 2008 13:41:01 +0000

@MBL — Yeah, it’s quite humbling to understand what 100 shares of Microsoft really means in the grand scheme of things.

@Ryan — I am overdue for some sort of “investing guide” that ties everything on the blog together.

@Kevin — Great point to clarify the risky nature of stock investing.

@Steve — I agree with value investing strategy — that’s my preference as well.

By: Steve

Steve — Sat, 13 Sep 2008 16:04:08 +0000

Great article and introduction. To speak to Kevin’s point above, if you approach stock picking from a value basis, your investing becomes less speculative. Rather, you are looking for stocks that are priced inaccurately low (remember, the stock market is not perfect) given the company fundamentals and growth expectations. Of course, there is always risk, but careful selection with thorough research can minimize this risk. This is a longer-term investment strategy.

By: Kevin (ReturnToManliness)

Kevin (ReturnToManliness) — Thu, 26 Jun 2008 17:44:41 +0000

Great post and very informative. People just need to remember that investing in the stock market is more like speculating than true investing. Even with dividend paying stocks, you are buying an equity position in a company and equity is only worth what people “think” it is worth.

Unlike income producing assets or known returns, equities can lose all their value overnight or triple in that same timeframe – based on people’s perceptions. That being said, some equity is entities is less risky than others simply because they have been around longer. But don’t be fooled by this either. GM stock is now trading at levels not seen since the early 1970′s. That means the company has receded in value since then – not grown.

Great post though to help with the unraveling of what it means to be investing in the stock market.

By: Ryan

Ryan — Thu, 26 Jun 2008 16:22:19 +0000

I’ve been looking forward to a series of posts like this for awhile. Looking forward to the rest of the posts! As a beginner, it’s very daunting to try to understand the stock market, especially with just a little bit of income to invest.

By: MBL

MBL — Thu, 26 Jun 2008 15:33:01 +0000

Great way to put into perspective with 1 percent of Microsoft. I always wondered how many shares one percent was and had to laugh when I found out here that it was 93 million shares.

But indeed, purchasing a share means ownership. In a sense, you are taking responsibility for your company’s action which is why we vote at the meetings if we approve or disapprove of the direction the company is heading in.

Now only if we could vote on the company’s discretionary funds and dividend payouts…

Looking forward to reading more.

By: Curt

Curt — Thu, 26 Jun 2008 14:53:01 +0000

Great article about the stock market. It’s too bad the Dow is headed for a 200 point drop today and moving towards a 3-month low.