What is Common Stock?

Gain Ownership In Companies and Increase your Personal Wealth

Often referred to as equity, common stock represents ownership in a publicly traded company. It entitles you as an investor to a portion of the company’s earnings and allows you to receive dividend payments when paid out. 

Historically, common stock has been the most rewarding asset class over the long-term allowing investors to see a higher Return on Investment (ROI) in comparison to fixed income (bonds). 

It is also an effective tool for Hedging Against Inflation! Protect YA Cash in order to preserve growth of principal and protect your overall purchasing power. 

The associated risk of holding common stock is that you as an investor can lose the entire principal of your initial investment in the event the company has to liquidate due to bankruptcy. 

You Get ALL the GOOD & Ugly. There is usually More GOOD!

You as an investor will reap the rewards and also bear the brunt of the loss when holding equity. If you have a long-term investment horizon, equity has proven to be the most rewarding asset class when it comes to investing despite this inherent risk. 
This is because common stockholders have the lowest priority behind preferred stockholders and bondholders. Learn a bit more with Understanding Common Stock.