Bond Basics Overview Bonds are a core element of any financial plan to invest and grow wealth. If you are just beginning to consider investing in bonds, use this section as a resource to educate yourself on all the bond basics. In this section you will learn: what a bond is why financial professionals recommend that you have bonds in your diversified investment portfolio key factors to consider when evaluating a potential bond investment fundamental strategies for investing in bonds about tools and aids that will help you understand bonds - See more at: http://www.investinginbonds.com/learnmore.asp?catid=46#sthash.WlBv0Cit.dpuf the number of shares outstanding (market capitalization) is the value of a company. Comparing just the share price of two companies is meaningless. 3. Theoretically, earnings are what affect investors' valuation of a company, but there are other indicators that investors use to predict stock price. Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation's earnings and assets. Common stock gives shareholders voting rights but no guarantee of dividend payments. Preferred stocks provides no voting rights but usually guarantees a dividend payment. In the past, shareholders received a paper stock certificate -- called a security -- verifying the number of shares they owned. Today, share ownership is usually recorded electronically, and the shares are held in street name by your brokerage firm. Investing in stocks can be tricky business. In fact, it's best to treat all of your investment pursuits as a business. Heck, that's what Benjamin Graham (Warren Buffett's stock market mentor) recommended. Before you buy your first stock, you should master the basics of stock investing. This won't make you a great investor overnight, but only when you understand the fundamentals of investing can you learn how to invest in stocks with confidence.
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