Stocks are an essential part of funding for a company. The owners of a company can raise funds in a variety of ways, and one of the most prominent ways that large companies raise funds is by listing their company on a public stock market. A stock represents a share of ownership in a company. Anyone can acquire stock of a public company, if you have a brokerage account at a broker such as E-trade or Schwab.
I subscribe to the belief that Growth Fund investing is better than investing into value stocks. I enjoy this style of investing because I believe it can lead to better returns for clients. In my professional career, I focus on a buy and hold strategy for investing into growth stocks.
During my studies for the CFA, it is said that value stocks have outperformed growth stocks. Growth earned 8.6% while Value earned 9.03% over the period from 1990-2015. I don't subscribe to this belief for the following reasons:
I personally implement both growth and value traits in the investing that I do. Each of my purchases is made not only with a growth consideration, but with a solid understanding of value principles.
Many sophisticated investors will mix their investment styles, by having growth funds, value funds, large cap, mid cap, and small cap. This strategywill provide the investor with some amount of diversification and diminish the risk of having one style outperform the other.
Did I stress the importance of compounding your investments enough? It is one of the most important facets of investing, is to keep your money invested, keep adding to your base of invested funds, and let compounding do its work.
Have a good plan that will allow you to achieve your personal and retirement goals, while still
allowing you to feel comfortable with the level of riskiness with the investments you are making.