The word “investor” is generally used to refer to someone who owns a stock.

However, very often this may not be accurate. Someone who purchases stock can be either a speculator or an investor.

Which Is Which?

An investor takes the time and effort to research a company and figure out how well it is doing. They only purchase stock if it is trading at a discounted rate. An investor always takes data into account and does not let their emotions rule them. They are methodical and they have a set of rules when it comes to investing.

A stock price may deviate from its fundamentals. However, this usually does not last long. Value investors believe that fundamentals will prove to be right after some time. Hence they look for undervalued stocks in the hope that the true value of the stock will be realised in the future…