how to invest in common stock
stocks should be considered an important part of any investor s portfolio they carry greater risk than assets like cds preferred stocks and bonds however the greater risk comes with a higher potential for rewards over the long term stocks tend to outperform other investments but in the short term have more volatility 10investors can choose from different kinds of common stock growth stocks belong to companies expected to experience increasing earnings which raises their share value meanwhile value stocks are priced lower relative to their fundamentals and often pay dividends unlike growth stocks stocks are also classified by market capitalization into large mid and small cap categories large cap stocks are more frequently traded and usually represent well established stable companies in contrast small cap stocks often belong to newer growth oriented firms and tend to be more volatile 5