Stocks

Think of buying a stock as becoming a part owner in a company

As part owner, you have the opportunity to participate in a company's successes, as well as its failures. You also have the right to vote on members of the board of directors and other important matters that affect how the company is run.

Why own stocks?

As a shareholder, you could earn money in two possible ways:

Through distributions of a company's profits, called dividends;
From an increase in the share price, called price appreciation.

Larger companies tend to pay dividends quarterly, semiannually or annually. Often, shareholders can choose to receive cash payments or reinvest their dividends in additional shares of the company. Smaller companies tend to reinvest their earnings in order to stay competitive and may be less likely to pay regular dividends. However, smaller companies may offer more potential for price appreciation over time.

Additional reading you may want to do:

AARP Financial Inc. does not provide tax advice. Please consult a tax advisor for information pertaining to your particular situation.

The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, or legal, tax or investment advice, or a legal opinion. Individuals should contact their own professional tax or investment advisors or other professionals to help answer questions about specific situations or needs prior to taking any action plan based on this information.

The Financial Advisors are investment adviser representatives of AARP Financial Inc., an investment adviser.

While AARP endorses the services provided by AARP Financial Inc., AARP does not offer financial products or services itself and cannot recommend that you or any specific individual should purchase any particular product or service. AARP Financial Inc. is an investment adviser and a subsidiary of AARP.