Shares of stock represent equity ownership in a company. When you own shares, you actually own a small piece of the company. You may consider buying stock if you want to realize growth or increase your current income.
When buying stocks, you should be willing to accept the risk that your investments could decrease in value.
Stocks as an Income-Producing Investment
Stocks can produce income in two ways:
- Dividend Income: Many companies distribute part of their annual profits—usually on a quarterly basis—to shareholders in the form of dividend payments.
- Capital Gains: If you sell the stock for more than your purchase price, you realize a capital gain—the difference between what you paid for the stock and what you received in selling it, less fees and commissions.
There are tax consequences with regard to both Dividend Income and Capital Gains distributions. A BB&T Investment Services, Inc. Investment Counselor will take the time to talk with you about stock buying strategies and provide you with the right level of support for your needs.
Learn more about investing fundamentals, options and creating a financial plan.