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Making equity investment decisions

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I just purchased my first 100 shares of stock this year in November, and as you may have guessed I didn't really know what I was doing. My close friend studying finance invested close to $10,000 within the last 7 years with pretty good return if he was to sell now (and of course the thought of easy money can always have its influence). I threw in $500 and if I sell today I will have only lost about $40.

After reading further about the SEC, I was glad to know that this commission provides a type of "check and balance" in favor of the investor by promoting the disclosure of important market related information and fair dealing while also protecting against fraud. If you own a share or just a percentage of a share of a public company you will be happy to know that the SEC has regulated that they provide publicly their financial statements.

References:

Ross, S. A., Jordan, B. D. & Westerfield, R. W. (2013). Fundamentals of Corporate Finance, 10th Ed. New York, NY: McGraw-Hill/Irwin.

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Solution Summary

This solution discusses the points that need to be kept in mind before making investments in equities.

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Although SEC regulates publicly listed companies and ensure investors that companies comply with prescribed laws and regulations and provide accurate, reliable and timely financial and ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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