A stock is an equity investment. When you purchase a share of stock, you become a partial owner of that company — a stockholder or shareholder. Stock ownership allows you to benefit from both profits and growth in the company.
Investors typically purchase stock for two reasons: growth and income. Stocks offer strong potential to increase in value and stay ahead of inflation. Over time, the stock market tends to rise in value though the prices of individual stocks rise and fall daily. Some stocks also pay dividends which provide regular income to help fund retirement or pay for more investment to grow your portfolio. There are two main types of stocks.
Common stock is the most commonly traded type of stock and entitles owners to vote at shareholder meetings and receive dividends. When you read or hear about stocks being up or down, it always refers to common stock. Preferred stock usually doesn’t come with voting rights. However, preferred stock stockholders receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated. Though stocks have historically performed well over the long term, there’s no guarantee that your stock will produce higher returns or any returns on your investment. Understanding the factors that contribute to risk help you make sound investment decisions and keep losses to a minimum. Here are some factors to be aware of:
Actions of investors: If a large number of investors believe that the nation is entering a recession, their actions can affect the direction of the stock market.
Business conditions: A new patent, an increase in profits, a pending merger or litigation could affect investor interest and stock prices.
Economic conditions: Employment, inflation, inventory, and consumer spending influence the potential profit of a company and its stock price.
Government actions: Decisions on interest rates, taxes, trade policy, antitrust litigation, and the budget impact stock prices.
Global economy: Changes in foreign exchange rates, tariffs or diplomatic relations can cause stocks to go up or down.
Navigating the risks and accessing the potential rewards that come with investing in stocks and bonds is much easier with experienced guidance. Giarca Capital can help you select options that match your investor profile, taking into consideration your goals, timeline, and acceptable risk.
Giarca Capital is well positioned to help investors find the right mix of stocks to help meet their financial needs. Our highly dedicated professionals focus on each investor’s unique risk tolerance, liquidity needs, time horizon, and financial goals to develop a plan best suited to help reach those goals.
There are risks associated with investing in public offerings including unproven management, and established companies that may have substantial debt. As such, they may not be appropriate for every investor. Customers should read the offering prospectus carefully and make their own determination of whether an investment in the offering is consistent with their investment objectives, financial situation, and risk tolerance.
Research is provided for informational purposes only, does not constitute advice or guidance, nor is it an endorsement or recommendation for any particular security or trading strategy. Research is sometimes provided by independent companies not affiliated with Giarca Capital Please determine which security, product, or service is right for you based on your investment objectives, risk tolerance, and financial situation. Be sure to review your decisions periodically to make sure they are still consistent with your goals.