What is a Stock?

June 10, 2024

Investing in stocks involves owning a stake in a company which grants you the status of a shareholder to receive a portion of the company’s profits – either as dividends or for reinvestment. Stocks are commonly included in investment portfolios. They serve as a means for companies to generate capital for expansion.

Companies typically list their stocks on stock exchanges such as NASDAQ or the New York Stock Exchange, where prices can fluctuate throughout the trading session.

While stocks have the potential to appreciate in value over time, there is still a risk of loss if companies encounter challenges in the market. This highlights the significance of conducting research on companies and industries before making investment decisions.

Key Takeaways:

  • Understanding Stock Ownership: Purchasing stock makes you a part-owner of the company, entitling you to a share of its profits, either through dividends or by reinvestment into the company.
  • Market Volatility: Stock prices are subject to fluctuations throughout the trading day, reflecting changes in market conditions, investor perceptions, and broader economic indicators.
  • Risk and Reward: Stocks have the potential for significant returns, but they also carry the risk of losses, including the possibility of losing the entire investment if a company fails.
  • Research is Crucial: It’s essential for investors to conduct thorough research or consult professionals to understand the fundamentals of the companies they invest in to mitigate risks.
  • Professional Advice: For those uncertain about the stocks they own or those looking to better understand their investments, consulting with financial advisors can provide crucial insights and guidance tailored to individual financial goals.

Investors should regularly review their stock holdings and stay informed about their investments to ensure they align with financial objectives and risk tolerance. Consulting professionals can also aid in making informed decisions.

For personalized advice on navigating the stock market and building a diversified portfolio, consider our wealth management services at Landsberg Bennett Private Wealth Management.

Learn how we can assist in managing your investments. Our advisors can provide tailored guidance to align your strategy with your financial goals and risk tolerance.

Request Information

Landsberg Bennett is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.

This is not an offer to buy or sell securities, nor should anything contained herein be construed as a recommendation or advice of any kind. Consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. No investment process is free of risk, and there is no guarantee that any investment process or investment opportunities will be profitable or suitable for all investors. Past performance is neither indicative nor a guarantee of future results. You cannot invest directly in an index.

These materials were created for informational purposes only; the opinions and positions stated are those of the author(s) and are not necessarily the official opinion or position of Hightower Advisors, LLC or its affiliates (“Hightower”). Any examples used are for illustrative purposes only and based on generic assumptions. All data or other information referenced is from sources believed to be reliable but not independently verified. Information provided is as of the date referenced and is subject to change without notice. Hightower assumes no liability for any action made or taken in reliance on or relating in any way to this information. Hightower makes no representations or warranties, express or implied, as to the accuracy or completeness of the information, for statements or errors or omissions, or results obtained from the use of this information. References to any person, organization, or the inclusion of external hyperlinks does not constitute endorsement (or guarantee of accuracy or safety) by Hightower of any such person, organization or linked website or the information, products or services contained therein.

Click here for definitions of and disclosures specific to commonly used terms.