Sheesh! The stock market fluctuates more than my weight. Up and down and up and down…This see-saw effect seems to be the standard for this monster. I was tempted earlier to change my stock companies, at the sight of a $20,000 loss, but decided against it. My portfolio has remained the same. The stock prices for my companies fluctuated that much in just a few short weeks. The lesson learned?

Don't panic when it drops. Long-term investing isn't about what you made or lost today - it is about what you can do for your future financial condition. Trust that the companies you picked will recover and rebound. I did…and they did. Will they continue to rebound? Nobody knows.

Let's tackle some more definitions before we move on. According to my research, there is an important difference between public stocks and private stocks.

InvestorWords defines public as "Having shares available to retail investors in the open market" while private is defined as "Personal or restricted, as opposed to public." If a company is listed on any of the exchanges, for example NYSE, NASDAQ, AMEX…you and I can purchase shares in the company. Portions of these companies are publicly traded.

Privately traded companies are owned by a few people who are responsible for the operation of the company and who own the majority of the stock in that company. These individuals can offer shares to others, but not on the open market of the exchanges.

One major difference between public sector and private sector? Public companies are overseen by the government and under the purview of the Securities and Exchange Commission. Remember: the Commission is the watchdog group that keeps everything on the up and up with our investment dollars.

Corporations and individuals, without government intervention of any type control private companies. It appears that I could purchase stock in a private company but I would have to know somebody, who knows somebody else, who knows somebody's second cousin. I don't think I have those connections so I'll stick with the publicly traded companies.

I found the differences between growth stocks and value stocks to be a bit more complex. Prior to investing my own money, I needed to differentiate between the two.

First, growth stocks per Wall Street Dictionary, "A stock that financial experts predict will rise quickly in price because the issuing company is in an expanding industry or in the midst of some new and potentially popular technology."

For some reason, thoughts of the World Wide Web come to mind when I imagine growth stocks. I get dizzy trying to follow all the new Internet technologies that cover everything from e-books to faster chips to all the new handheld gadgets.

Popular? Yes. Sustainable? Who knows! I have found that predicting the virtual world is just as difficult as predicting the stock market world. There are definite benefits and risks to both.

Next onto value stocks, which I soon learned are not called "value stocks" but rather value investing. As per InvestorWords this is "An investment style which favors good stocks at great prices over great stocks at good prices. Utilizes such valuation measures as price to book ratio, price/earning ratio and yield."

Okay…slowly, ever so slowly. Let's start with the first part of this definition. This investment style lends itself to someone who knows the difference between good and great and also knows their stock prices.

Wouldn't it be nice if companies would tell us in their summary sheets, --Hey beginners! Our stocks are not growth stocks but they sure are good for value investing or vice versa, and that we could trust them!

But that it should all be so easy. This is where my intuition, gut-feelings and research come into play. I need to second-guess the growth stocks and pick one that may be getting ready to take off AND I also want to pick one from those that actually are getting ready to take off…that are a good price but not a great price. Would this make me a "growth stock value investor?" Is there such a thing?

Or, maybe I could choose an easier route…I can just invest in one of the Blue Chip companies that comprise the Dow. These are some very tough decisions.

While I'm trying to decide, let's move onto the second part of the definition: "…price to book ratio, price/earning (P/E) ratio and yield." Remember these terms from last week. This is a nice lead-in to next week's article where I seek out these and other definitions.

Thank you for joining me,

Joyce

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