Stocks and Bonds
Whether you’re seeking growth, income or a combination of the two, stocks (individual equities) are a versatile investment instrument that can help you reach your objectives.
What are stocks?
Stocks are investments that represent ownership – or equity – in a corporation. When stock is purchased, the investor has an ownership share – however small – in the corporation. This entitles the investor to part of the corporation’s earnings and assets.
Stock investors – called shareholders or stockholders – make money when the stock increases in value, when the company that issued the stock pays value, or when the company that issued the stock pays dividends, or a part of its profits, to its shareholders.
How stocks are traded
Some companies are privately held, which means their shares are available to a limited number of people, such as the company’s founders, its employees and investors who helped fund its development. Other companies are publicly traded, which means their shares are available to any investor. Through our broker/dealers you have access to all major U.S. stock exchanges, including New York Stock Exchange, American Stock Exchange and Nasdaq.
Fixed income securities offer the advantages of a reliable source of income and protection of principal when held to maturity through corporate bonds, treasury securities (T-bills), government agency securities, preferred securities, zero-coupon securities and mortgage-backed securities. These investments pay interest or dividends on a regular basis. In addition, bonds promise the return of principal when the bond matures. However, there are credit and liquidity risks associated with these type of investments.
A portfolio heavy in fixed income investments may not provide the protection an investor needs to fight the effects of inflation. This is because the rate of return for fixed income investments is historically lower over the long term than the return of equity investments, like common stock. However, fixed income securities provide the diversification that is needed to maintain a well-balanced investment portfolio.