When you buy shares of a company, you, yourself, become a part owner of that company. As a shareholder, you get the same basic rights and privileges as people who own millions of shares.
If the company makes money, your stock's value will increase. When the company loses money, your stock's value will decrease.
Technicians look at stock prices from the past to predict future prices. They usually buy and sell stock in a very short time. Most of the time they ignore fundamental (basic) like: book values, dividends, and earnings (profit). Young investors should know of the high transactions costs and the high taxes when trading stock all the time. .
Fundamentalists look at how much the value of a company grows over a long period of time. They look for what might be best in the future. Certain things they look for are earnings, dividends, and book values. They expect that the stock prices will go up as those companies" earnings grow in the long run. Fundamentalist, also known as value investors, ignore the daily ups and downs of the stock market. .
If you've picked a good stock, then keep it. If it's making money then there is no need to get rid of it. You should always pick the best of them all. If you just buy the best company in the business, you should always do alright.
If you want to be a successful investor, then you need to know when to cut some stock loose. If it just keeps going down, don't wait for them to cut back.
