Stocks

Stocks represent shares of ownership in a corporation. Corporations issue stock to raise funds for the company. The value of these shares can rise or fall based on investor expectations of future corporate earnings.

There are three primary reasons investors may choose to invest in stocks:

1. Long-term growth opportunities. Stocks entail more risk than other types of financial assets. Although past performance is no guarantee of future results, over longer periods of time stocks have generally out performed other financial investments.
   
2. Inflation-fighting potential. Stocks offer the potential for rising income through dividend growth. Rising income helps protect investors against inflation, which is critically important when you’re investing toward a long-range goal such as retirement.
   
3. Diversification. Stocks combined with other investments, can help reduce the uncertainty of future portfolio returns, compared to only investing in only one type of security. Diversification does not ensure against loss.

To learn more about investing in stocks and their place in a diversified portfolio:

• Common Stock
• Preferred Stock
• Employee Stock Option