Invest in the Stock
units of ownership in a company. They represent a claim on the
company's assets and earnings. Stocks also usually carry voting
rights which can be exercised for any corporate decisions.
Throughout history, stock ownership has been an excellent way
to build wealth.
Generally, there are two main types of
stock. The majority of stock is issued in the form of common
stock. Common stock typically carries voting rights, but in the
event of liquidation common shareholders do not receive
money until after creditors, bondholders, and preferred
shareholders are paid. This type of stock usually has
the potential for the greatest long term returns since it
carries the most risk.
Preferred stock typically does not
come with voting rights, but may provide a guaranteed fixed
dividend payment. Compared to common stock, there is less
potential for capital appreciation, but preferred shareholders
have preference in the event of liquidation.
Stocks can be purchased from a stock
broker. There are generally full service brokerage firms that
offer advice and help manage your account or discount brokerage
firms that offer little personal attention.
Dow Jones Industrial
The Dow Jones Industrial Average is one
of the most widely followed stock market indices. It was
created by Charles Dow in 1896. At the time it contained only
12 stocks, which were primarily industrial. Today, the index
contains 30 stocks and are no longer limited to industrials.
The stocks represent some of the largest and most widely held