Why stocks exist? Stocks are a a small piece of company. when we buy stocks we buy a small ownership. Owners entitled for a profit or loss. On the other hand lenders(bond holders etc) they are not entitled for profit. They get what they agreed when they lend money. when the company goes bankrupt the lenders get their money first. Most of the times stock holders wont get any money. Companies exist to increase the value of a shareholders. if the company is not increasing the value then it is not the good investment.
Companies are like credit rating is more like our own credit rating. If the company consistently making good progress it has a good rating. on the other hand if it borrows lot of money fulfill the interest rate and not making enough profit for the shareholders then it is not a good investment. A good investment is giving good returns over a long peroid of time with less risk and less time spent.
Day traders and option trading requires lot of time spent everyday and lot of risk. People good at option trading say there is less risk but for normal investors that incurs lot of risk.
