Risk is perhaps the most significant.
Stocks are subject to various types of risk, including:
- business and financial risk,
- purchasing power risk,
- market risk and
- event risk.
- a stock's earnings and dividends,
- its price appreciation and
- of course, the rate of return that you earn.
- government control and regulation,
- foreign competition and
- the state of the economy.
- you not only identify a company that will exhibit strong future financial performance (in terms of sales and earnings)
- but also that you can spot that opportunity before other investors do and bid up the stock price.