Easy Guide to Investing Stocks
Things for you to keep in mind when you are investing in Stocks:
Owning stock is owning a company
- you have the right to be informed of material changes to the company's prospects for growth and its risk of failure.
Stocks grow two ways
- you earn dividends on the stocks you purchase.
- dividends + capital appreciation = "total return"
*Stocks rise and fall in value
your goal is that the stock will increase more than inflation
*You WILL pay taxes
you want your total return to exceed both TAXES that you pay and INFLATION over a period of time
*stocks can be volatile
stocks will rise and fall by a broad percentage in a short period of time
they are usually more volatile than bonds & appreciate more over long periods
If a company fails and files for bankruptcy then their investors lose everything! One way to reduce the risk of losing all your money is to own a large number of individual stocks.