Common Stock

Description: When you purchase stock, you become part owner of a company. As an owner, you are usually entitled to voting rights and to a share of the company’s profits, a portion of which are distributed in the form of cash dividends. Dividends are not guaranteed.

Objective: Individuals may invest in stock for a number of different objectives, including growth of principal, current income or a combination of both.

Suitability: Stocks are suited for long-term investors who recognize that in return for potentially greater rewards they assume greater risk.

Product Features

Growth of Principal. Equity investments, such as common stocks, allow for growth of principal and increasing dividend income.
Probability of Higher Returns. Although past performance is no guarantee of future results, over longer periods of time stocks have generally outperformed other investment alternatives and provided returns well above the rate of inflation.
Risk. Risk is measure over how much a stock price changes over a period of time. Some stocks have a high degree of risk while others are more predictable and do not change much from day to day.