Stocks Key concepts

Question 1

What is stocks?

Answer 1

Stocks is the home for public companies, they put up a small percentage of their company to sell.
You purchase small percentages in the form of shares.

Question 2

What 3 things do you consider when investing in a company?

Answer 2

1. Financial Statements of the company
2. Management of the company
3. The company Brand

Question 3

Active Investors &Pros/Cons

Answer 3

Buy a company and sell it within a year.
Pros: Can make large profits in short amount of time
Cons: More risky, do not know when the market is going to go down so can end up losing all profits instantly.

Question 4

Inactive Investors & Pros/Cons

Answer 4

Get charged 1 percent every year for your portfolio ( different types of stocks )
Pros: Have the portfolio done for you
Cons: This 1 percent gets compounded and turns in to ⅓ instead of 1 percent

Question 5

Passive Investors &Pros/Cons

Answer 5

Investing beyond 1 year and so on (Long term investment)

Pros: Can be very profitable in the long run
Cons: Can be stressful when you see your stocks lose value and tempting to abandon said company.