Stock (Part 1)

    Investing in a stock is much different from investing in a bond, primarily in the "right" of holder. A stock holder has an "owner" right, but a bond holder has a "creditor" right. I will give you a clear example to see the pro and con of both assets.
 
 Example: John invests in company A by buying company A's stock $100. Luke invests in company A by purchasing bond of company A 100$ with 3% interest per year.

Scenario1
    One year later, company A makes a huge profit around 20% of the company's value.
- John will get 20$ (20% from 100$ stock)
- Luke will get 3$ (3% interest on 100$ bond)

Does this mean a stock is better than a bond?.........Let's see "scenario 2"

Scenario2
    One year later, company A faces a huge loss around 20%.
- John will lose 20$
- Luke will get 3$

In the second scenario, Luke is better off than John because the creditor right is to get the constant payment company promised (interest). On the other hand, the owner return is concurrently following the company's performance, no constant or fix return like bond.

    To this point, I believe you can see the point I try to make. Not only do stocks have a chance to get higher return than bonds, but also have higher "risk". Therefore, first thing, if you want to invest in stocks, is to take risk of stock into account. Ask yourselves "Can you accept loss like 40-50% of your principle?"  If you could not sleep when you invest in stocks, that is a sight of putting too much money in stocks.