NOTE: Knowing the ins and outs of the stock market isn’t always enough to become a successful investor. If you want to know all of my secrets (especially the “hidden in plain sight” ones), then go and read THIS:

http://www.independentvalueinvestor .com/MultiplyYourMoney.html

Tra der,

In the next edition of the “Independent Value Investor”, I’m going to go deeper into what to look for in applying the second secret: Buying At The Right Price.

Once you’ve found some great companies to invest in, you’ll want to make sure that you’re not paying too much for them, and giving yourself the best chance to make some great money. I’ll go into that next time…

In the meantime, here’s a question that I thought you might find interesting…

*** QUESTION ***

When you invest in a stock do you get a certificate? If that’s true then? How about if you are buying and selling various stocks all day long? do you get a certificate in the mail a week later for a stock that has been long gone because you sold it? (Apparently people keep their stock certificates in a lock box or something ? )

If there is a natural disaster or a fire should you grab your stock certificate papers and run out of the house with them?

— T

MY COMMENTS

Hey T,

This is a great question, because most people don’t really think about the certificates that are issued when they buy stock…

In general, your stock certificates would be held by your broker.

So, what’s a broker?

A “broker” is a company that is licensed to be a go-between with buyers and sellers. What these brokers then do is make sure that all buy and sell transactions are cleared properly.

With their license, brokers have custody of their clients’ assets, including cash AND stock certificates. When you set up an account with a brokerage firm, you are giving them the ability and responsibility to hold your assets on your behalf.

That way, when you buy stock, they hold your certificates, and when you sell stock, they make sure the certificates are passed along to the new owner.

You get account statements about what you own from the brokerage firm, but the brokerage firm is the one that holds your stock certificates on your behalf.

So, no need to worry about a fire — your broker is holding your stock certificates for you!

By the way, if you’re ever interested in owning just one share of stock so that you can actually own the certificate, you can go to www.OneShare.com — you can buy one share of stock from Barnes & Noble, Disney, Harley-Davidson and a whole bunch of other companies. This isn’t really for an investment, but it’s pretty neat to actually own the certificate…

***

I hope you found that interesting. I think OneShare is a really interesting way to own stock or even give them as unique gifts to friends and family…

Until next time, Mic

P.S. If you have a question for me, feel free to e-mail me at micfarris@independentvalueinvestor.com

CF Media, 3217 Peppermint Street, Thousand Oaks, CA 91320, USA