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stock Archives

What is a Stock?

The definition of a stock is simple enough; it’s what you do with it that matters.

A stock is an equity investment that represents part ownership in a company. When you invest in a stock, you own a small portion (or shares) of that company.

Simple enough, right? You own a portion of a company, so when that company makes money, you make money. Why then, does investing seem so complicated?

In some ways, buying a stock is like playing chess. The different segments and products on the market all move in different patterns and compete or complement one another. There are mutual funds, hedge funds, ETFs, index funds, stocks, bonds, emerging markets, and on and on. It probably doesn’t help that a stock is also called a security or a position. But when you get beyond the multiple names and break it down, there are some very simple elements to investing in a stock.

Any one of us can buy a share (ownership) in a publicly-traded company (as opposed to a privately-owned company). Most often, this ownership comes in the form of stocks. As long as there is someone willing to sell, you can buy a single stock or as much as you want.

The catch is that what might be a great stock for one investor might not be a good stock for you. So how do you find good stocks to invest in?

The first question to ask is, what kind of stock do you want? Obviously, you want a stock that goes up; that much is certain. But the big question is, how much risk can you tolerate?

If you’re chasing high returns and are comfortable with high risk, you can follow a momentum strategy.

Moving down the risk scale a bit, you could focus on picking good growth stocks. But in growth stocks too, risk can be substantial, and if you can’t sleep well at night because your stock holdings worry you, you’re investing at too high a risk level.

Then there are undervalued stocks. Good undervalued stocks have low risk because ideally, they are so cheap that they can’t fall any lower!

A dividend-paying stock, properly selected, has very low risk and substantial upside potential, particularly over the long term.

When investing on your own, the most common way to buy a stock is through a brokerage firm. Thanks to the internet, using a brokerage firm to invest is easier—and more affordable—than ever. There are a variety of popular online discount brokerage firms—TD Ameritrade, E*Trade, Fidelity— and none of them charge more than $10 every time you make a trade (and some of them no longer charge a dime!).

If you want to dip your toes into investing, download our FREE report, How to Invest in Stocks: How Stocks Work, How to Calculate Return on Investment and Other Investing Basics.

This free report aims to give you the confidence – and the right know-how – to dive right into the stock market. We’ll show you how.

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Cabot Prime Pro Week Ending March 5, 2021

From the Cabot Prime Pro Week Ending March 5, 2021 issue of Cabot Prime Pro|by Cabot Wealth Network|Cabot Prime Pro

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
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Cabot Prime Week Ending March 5, 2021

From the Cabot Prime Week Ending March 5, 2021 issue of Cabot Prime|by Cabot Wealth Network|Cabot Prime

Stock Recommendation Tracker The Stock Recommendation Tracker is a table that features all of the current recommendations in all of our portfolios. It’s a quick way for you to see what stocks are currently in our portfolios and will highlight new additions or any to...
Read More

Cabot Turnaround Letter Weekly Update

March 5, 2021|From Cabot Turnaround Letter|by Bruce Kaser|Value Investing

Today’s note includes earnings updates, ratings changes and the podcast.
Read More

Cabot Small-Cap Confidential Special Bulletin

March 5, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
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Cabot Growth Investor Special Bulletin

March 5, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks remain under the gun, and while we’re already relatively defensive in the Model Portfolio, we’re going to do a little more trimming now
Read More

Cabot Early Opportunities Special Bulletin

March 5, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

Suffice to say the last two weeks have been very tough. On the one hand, yes, of course some sort of correction or pullback has been expected given the huge progress the market – and growth stocks, small caps and IPOs in particular have...
Read More

VIDEO: Focus on Capital Preservation | Cabot Weekly Review

From the issue of |by Mike Cintolo|Stock Market |

In this week's video, Mike Cintolo talks about the meltdown in growth stocks and his increasingly cautious stance.
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Cabot Top Ten Trader Movers and Shakers Weekly Update   

March 5, 2021|From Cabot Top Ten Trader|by Mike Cintolo|Growth Stocks

The iffy up-down-up-down action in leading growth names starting in late January led to some key breakdowns last week, and this week, growth stocks have been routed—the Nasdaq is down nearly 4%, but most leading names are off much more than that, with coming...
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Don’t Let the Capital Gains Tax Scare You Out of Booking Profits

Don’t Let the Capital Gains Tax Scare You Out of Booking Profits

From the issue of |by Mike Cintolo|How To Invest

Avoiding the capital gains tax is no reason to miss out on booking profits in winning stocks. Here's what you should do.
Read More

Cabot Growth Investor Bi-weekly Update

March 4, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

The sellers ran wild today, with the Dow losing 346 points, the Nasdaq falling 274 points (2.1%) and the average growth stock we own or watch down nearly 5%. From late January through late February, we began to see a change in character, a..
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Cabot Early Opportunities Special Bulletin

March 4, 2021|From Cabot Early Opportunities|by Tyler Laundon|Small Cap Stocks

With the market continuing to weaken we’ll move incrementally more into defensive mode until the smoke begins to clear and we can better distinguish the stocks that will emerge as the next leaders. While there is a lot we could say about just any...
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Cabot Global Stocks Explorer 730

From the Cabot Global Stocks Explorer 730 issue of Cabot Global Stocks Explorer|by Carl Delfeld|Emerging Markets

The market is hitting a little turbulence, which is natural as it feels its way across the timing of the pandemic economic recovery, concern over debt, interest rates, and inflation.
Read More

Cabot Small Cap Confidential 262

From the Cabot Small Cap Confidential 262 issue of Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

The Big Idea One of the unsung heroes of the online retail boom is a largely unknown technology – digital printing on fabrics and textiles. While many traditional manufacturers and retailers of clothes, fashion items and home décor were destroyed during the pandemic, the inverse true...
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The GameStop Stock Affair, One Month Later: 3 Positive Outcomes

The GameStop Stock Affair, One Month Later: 3 Positive Outcomes

From the issue of |by Timothy Lutts|Stock Market

It's been a month since GameStop stock, Robinhood and Reddit captured America's attention. Here are some good things that came out of it.
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Cabot Marijuana Investor Update

March 3, 2021|From Cabot Marijuana Investor|by Timothy Lutts|Growth Stocks

I’m tempted—I really am—to take some of our 46% cash position and move it back into marijuana stocks. Since the sector peaked three weeks ago, most of the stocks have had a decent pullback and now the best are moving up again, heading those...
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Cabot Growth Investor Special Bulletin

March 3, 2021|From Cabot Growth Investor|by Mike Cintolo|Growth Stocks

Growth stocks continue to bleed today, with many down 4% to 10% even as money rotates into cyclical areas. Our trend-following indicators are still positive, so we’re not selling wholesale, but as growth investors, we are turning cautious—we came into this week with in...
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Cabot Dividend Investor Weekly Update

March 3, 2021|From Cabot Dividend Investor|by Tom Hutchinson|Dividend Stocks

The market has gotten a little choppy and interest rates are to blame. At least, that’s what they say. The market indexes fell last week and have been all over the place so far this week.
Read More

3 Self-Driving Car Stocks with Great Charts

3 Self-Driving Car Stocks with Great Charts

From the issue of |by Chris Preston|Growth Stocks

Autonomous driving is a $556 billion industry waiting to explode. But these self-driving car stocks are already taking off.
Read More

Cabot Small-Cap Confidential Special Bulletin

March 3, 2021|From Cabot Small-Cap Confidential|by Tyler Laundon|Small Cap Stocks

Arena Pharmaceuticals (ARNA) yesterday announced that olorinab failed to meet the primary endpoint in the Phase 2 CAPTIVATE study in IBS abdominal pain. This is disappointing but not remotely the reason to own (or sell) the stock. IBS is a difficult to treat condition when...
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Cabot Micro-Cap Insider Update

March 3, 2021|From Cabot Micro-Cap Insider|by Rich Howe|Small Cap Stocks

Vaccines are being rolled out, and the economic recovery will be strong in 2021. Stocks that will benefit from the economic recover should have strong tailwinds. While our entire portfolio should benefit from an improving economy, two stand out to me.
Read More

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