Some stock's prices don't fluctuate widely - Is it an advantages?
Oracle specifically is paying a dividend with a current yield of about 1.4% annually and has appreciated nearly 50% over the last 5 years.  Granted, the past doesn't guarantee the future but the company has paid a pretty steady dividend since 2009.  If you're buying as part of an employee program you would presumably be holding the shares for a long time and the daily and even monthly movements aren't terribly relevant to a long term holding period. Additionally, you may be able to buy the shares at a discount to the market price as part of your employee program.  You probably also won't pay any transaction fee. I don't think you are reading the stock chart right.  ORCL has a beta of 1.12 which means it has more volatility than the market as a whole.  See image below for a fairly wild stock chart for a year.   I would not truly consider ESPP participation investing, unless you intend to buy and hold the stock.  If you intend to sell the stock soon after you are able, it is more speculation.  ESPP's are okay based upon the terms.  If the stock was a constant price, and you could sell right away, then an ESPP plan would be easy money.  Often, employees are often given a 15% discount to purchase the stock.  If you can sell it before any price drop, then you are guaranteed to make 15% on the money invested minus any commissions.   Some employers make ESPP participants hold the stock for a year.  This makes such a plan less of a value.  The reasons are the stock can drop in price during that time, you could need the money, or (in the best case) your money is tied up longer making the ROI less. The reasons people invest in stock are varied and is far to much to discuss in a single post.  Some of your colleagues are using the ESPP solely to earn the discount in their money. Apart from making money from the price difference, some stocks also give dividends, or bonus issues. For long term investors whom are looking for steady income, they may be more interested with the dividend pay-out instead of the capital-appreciation. What is your investment goal?  Many investors buy for the long haul, not short-term gain.  If you're looking for long-term gain then daily fluctuations should be of no concern to you.  If you want to day-trade and time the market (buy low and sell high with a short holding period) then yes less volatile stock can be less profitable, but they also carry less risk.  In that case, though, transaction fees have more of an impact, and you usually have to trade in larger quantities to reduce the impact of transaction fees.
"No, there are neither advantages nor disadvantages. I'll take on this question from an accounting standpoint.   Financial statements, the tools at which the market determines (amongst other things) the value of a stock, are converted at year end to the home currency (see 1.1.3).If Company A has revenue of 100,000 USD and the conversion to EUR is .89, revenue in the European market will be reported as 89,000 EUR. These valuations, along with ratios, analysis, and ""expert"" opinions determine if a person should own shares in Company A.  Now, if we're talking about comparing markets this is a entirely different question.  Example:  Should I buy stock of Company A, who is in the American market (as an European)?  Should I buy stock of Company B, who is in the European market (as an American)? I would recommend this as additional level of diversification of your portfolio to inlcude possible large inflation of either the currency. The possible gains of this foreign exchange may be greater if one or the other currency becomes weak." A stock is only worth what someone is willing to pay for it. If it trades different values on different days, that means someone was willing to pay a higher price OR someone was willing to sell at a lower price.  There is no rule to prevent a stock from trading at $10 and then $100 the very next trade... or $1 the very next trade. (Though exchanges or regulators may halt trading, cancel trades, or impose limits on large price movements as they deem necessary, but this is beside the point I'm trying to illustrate). Asking what happens from the close of one day to the open of the next is like asking what happens from one trade to the next trade... someone simply decided to sell or pay a different price.  Nothing needs to have happened in between. The value of a foreign stock is subject to fluctuations in the foreign currency value; this is not the case for domestic stocks. "There are some good answers about the benefits of diversification, but I'm going to go into what is going on mathematically with what you are attempting. I was always under the assumption that as long as two securities are less than perfectly correlated (i.e. 1), that the standard deviation/risk would be less than if I had put 100% into either of the securities. While there does exist a minimum variance portfolio that is a combination of the two with lower vol than 100% of either individually, this portfolio is not necessarily the portfolio with highest utility under your metric.  Your metric includes returns not just volatility/variance so the different returns bias the result away from the min-vol portfolio. Using the utility function: E[x] - .5*A*sig^2 results in the highest utility of 100% VTSAX. So here the Sharpe ratio (risk adjusted return) of the U.S. portfolio is so much higher than the international portfolio over the period tracked that the loss of returns from adding more international stocks outweigh the lower risk that you would get from both just adding the lower vol international stocks and the diversification effects from having a correlation less than one. The key point in the above is ""over the period tracked"".  When you do this type of analysis you implicitly assume that the returns/risk observed in the past will be similar to the returns/risk in the future.   Certainly, if you had invested 100% in the U.S. recently you would have done better than investing in a mix of US/Intl.  However, while the risk and correlations of assets can be (somewhat) stable over time relative returns can vary wildly! This uncertainty of future returns is why most people use a diversified portfolio of assets.  What is the exact right amount is a very hard question though." This can arise with very thinly traded stocks for large blocks of shares. If the market only has a few thousand dollars available at between 8.37 and 12.5 the price is largely meaningless for people who want to invest in hundreds of thousands/millions of dollars worth, as the quoted price can't get them anywhere near the number of shares they want. How liquid is the stock in question? Also important to keep in mind is the difference in liquidity. The stock could be very liquid in 1 exchange but not in another. When times get bad, liquidity could dry up 1 one exchange, which results in a trading discount. The important thing to realize is, what would you do, if you didn't have the call? If you didn't have call options, but you wanted to have a position in that particular stock, you would have to actually purchase it. But, having purchased the shares, you are at risk to lose up to the entire value of them-- if the company folded or something like that.  A call option reduces the potential loss, since you are at worst only out the cost of the call, and you also lose a little on the upside, since you had to pay for the call, which will certainly have some premium over buying the underlying share directly. Risk can be defined as reducing the variability of outcomes, so since calls/shorts etc. reduce potential losses and also slightly reduce potential gains, they pretty much by definition reduce risk. It's also worth noting, that when you buy a call, the seller could also be seen as hedging the risk of price decreases while also guaranteeing that they have a buyer at a certain price. So, they may be more concerned about having cash flow at the right time, while at the same time reducing the cost of the share losing in value than they are losing the potential upside if you do exercise the option. Shorts work in the same way but opposite direction to calls, and forwards and futures contracts are more about cash flow management: making sure you have the right amount of money in the right currency at the right time regardless of changes in the costs of raw materials or currencies. While either party may lose on the transaction due to price fluctuations, both parties stand to gain by being able to know exactly what they will get, and exactly what they will have to pay for it, so that certainty is worth something, and certainly better for some firms than leaving positions exposed. Of course you can use them for speculative purposes, and a good number of firms/people do but that's not really why they were invented. That makes sense.  So it's sort of a thoughtless process on a short time scale, but if you add up all that noise over time you could (potentially) end up with a more meaningful position than if you had valued and bet on each stock individually.  And I could see how these things could spread along a chain to unrelated stocks as well... One of the often cited advantages of ETFs is that they have a higher   liquidity and that they can be traded at any time during the trading   hours. On the other hand they are often proposed as a simple way to   invest private funds for people that do not want to always keep an eye   on the market, hence the intraday trading is mostly irrelevant for   them. I am pretty sure that this is a subjective idea. The fact is you may buy GOOG, AAPL, F or whatever you wish(ETF as well, such as QQQ, SPY etc.) and keep them for a long time. In both cases, if you do not want to keep an on the market it is ok. Because, if you keep them it is called investment(the idea is collecting dividends etc.), if you are day trading then is it called speculation, because you main goal is to earn by buying and selling, of course you may loose as well. So, you do not care about dividends or owning some percent of the company. As, ETFs are derived instruments, their volatility depends on the volatility of the related shares. I'm wondering whether there are secondary effects that make the   liquidity argument interesting for private investors, despite not   using it themselves. What would these effects be and how do they   impact when compared, for example, to mutual funds? Liquidity(ability to turn cash) could create high volatility which means high risk and high reward. From this point of view mutual funds are more safe. Because, money managers know how to diversify the total portfolio and manage income under any market conditions. In the short term the market is a popularity contest In the short run which in value investing time can extend even to many years, an equity is subject to the vicissitudes of the whims by every scale of panic and elation. This can be seen by examining the daily chart of any large cap equity in the US.  Even such large holdings can be affected by any set of fear and greed in the market and in the subset of traders trading the equity. Quantitatively, this statement means that equities experience high variance in the short rurn. in the long term [the stock market] is a weighing machine In the long run which in value investing time can extend to even multiple decades, an equity is more or less subject only to the variance of the underlying value. This can be seen by examining the annual chart of even the smallest cap equities over decades.  An equity over such time periods is almost exclusively affected by its changes in value. Quantitatively, this statement means that equities experience low variance in the long run. Most stocks are not actively trades by lots of people.   When you buy or sell a stock the price is set by the “order book” – that is the other people looking to trade in the given stock at the same time. Without a large number of active traders, it is very likely the pricing system will break down and result in widely changing prices second by second.   Therefore for the market to work well, it need most people to be trading at the same time. Can't totally agree with that. Volatility trading is just one trading type of many. In my opinion it doesn't depend on whether you are a professional trader or not.  As you might have heard, retail traders are said to create 'noise' on the market, mainly due to the fact that they aren't professional in their majority. So, I would assume, if an average retail trader decided to trade volatility he would create as much noise as if would have been betting on stock directions. Basically, most types of trading would require a considerable amount of effort spent on fundamental analysis of the underlying be it volatility or directional trading. Arbitrage trading would be an exception here, I guess. However, volatility trading relies more on trader's subjective expectations about future deviations, whereas trading stock directions requires deeper research of the underlying. Is it a drawback or an advantage? I.d.k. On the other hand-side volatility trading strategies cover both upward and downward movements, but you can set similar hedging strategies when going short or long on stocks, isn't it? To summarise, I think it is a matter of preference. Imagine yourself going long on S&P500 since 2009. Do you think there are many volatility traders who have outperformed that? Foreign stocks tend to be more volatile -- higher risk trades off against higher return potential, always. The better reason for having some money in that area is that, as with bonds, it moves out-of-sync with the US markets and once you pick your preferred distribution, maintaining that balance semi-automatically takes advantage of that to improve your return-vs-risk position. I have a few percent of my total investments in an international stock index fund, and a few percent in an international REIT, both being fairly low-fee. (Low fees mean more of the money reaches you, and seems to be one of the better reasons for preferring one fund over another following the same segment of the market.) They're there because the model my investment advisor uses -- and validated with monte-carlo simulation of my specific mix -- shows that keeping them in the mix at this low level is likely to result in a better long-term outcome than if i left them out. No guarantees, but probabilities lean toward this specfic mix doing what i need. I don't pretend to be able to justify that via theory or to explain why these specific ratios work... but I understand enough about the process to trust that they are on (perhaps of many) reasonable solutions to get the best odds given my specific risk tolerance, timeline, and distaste for actively managing my money more than a few times a year. If that. "Take the case where a stock has just two owners, A and B, both at $10. One of them sells his shares to C, at $11.  Now B has made $1 in profit but is no longer an owner of the stock. A hasn't sold anything but his shares are worth 10% more due to the last traded price printed. C has bought shares at $11 and the price is $11, so technically he hasn't lost any money. In a larger market, there are winners and losers every day on a single stock, but they may not remain owners of a stock. There could be days in which those that remain owners are all winners - say when a stock goes up to an all time high and all those that are currently owners have an average buy price lower than the last traded price. And the reverse applies too.  It is of course more complicated. Say you own a stock and let someone else ""borrow"" it for a short-selling opportunity (he sells it in the market). For each uptick in price, you win, the short seller loses, and the guy he sold it to also wins. A person that has a covered call on a stock is not a winner beyond a point. And so on." As far as i understand the big companies on the stock markets have automated processes that sit VERY close to the stock feeds and continually processes these with the intention of identifying an opportunity to take multiple small lots and buy/sell them as a big lot or vice/versa and do this before a buy or sell completes, thus enabling them to intercept the trade and make a small profit on the delta. With enough of these small gains on enough shares they make big profits and with near zero chance of losing.