TYPES OF STOCK

Common stock - Common stock represents ownership in a company. As an owner, you are entitled to voting rights and to a share of the company's profits, which are distributed in the form of dividends. Stock dividends are not guaranteed. If the company performs poorly, you may not receive a dividend.

Preferred stock - Preferred stock takes precedence over common stock. Dividend payments must be paid to preferred shareholders before common shareholders. Should a company be liquidated preferred shareholders receive their share of the assets before common shareholders. However, if a company performs poorly, even preferred shareholders may not receive dividends.

 EQUITY GLOSSARY

Share - A piece of ownership in a company. The more shares a company has issued, the smaller the percentage of ownership your one share represents.

Dividends - Payments made to shareholders out of earnings. Not all companies pay dividends on their stocks. A dividend is stated in dollar amounts. For example, a dividend may be $2 per share, so if you own 100 shares, you'd receive $200 in dividends. Dividends are usually paid quarterly. Some are paid semiannually or annually.

Offer price - The price you would pay for a stock if you were buying. Stock prices are quoted in eighths and quarters of a point, e.g. 10 1/4.

Bid price - The price you'd sell at if you were selling your stock.

Spread - The difference between the offer price and the bid price.

Stock split - When a company splits its stock, shareholders receive additional shares. For example, in a two-for-one split, if you own 100 shares, you'd receive an additional 100 shares. When a stock split occurs the price of the stock also splits, so you end up with the same value you started with.

Reverse stock split - In a reverse stock split, one share of stock is issued for a number of old shares, for instance one share for every three shares.

 MEASURES OF COMPANY'S VALUE

Book value - A company's real net worth is found by subtracting the company's liabilities from its assets. Book value is sometimes called shareholder equity.

Debt to equity ratio - The ratio of a company's debts to its assets.

Total Market Value - A measure of the value of a company. This number is reached by multiplying the number of shares a company has sold to the public by the current market price. This number provides a way to measure the size of companies.

Earnings per share - The total earnings of a company divided by the number of shares the company has outstanding. Earnings per share is used to compare a company's earnings from Year to Year and to compare a company's performance to others in the industry.

 THREE TIPS FOR STOCK INVESTORS

1. Don't be greedy.
2. Cut losses quickly.
3. Don't cry or look back.

 OTHER EQUITY PRODUCTS

Growth and Income Equity Investments - The goal of these equity investments is to offer growth of principal and regular income .

Blue Chip Stocks - These stocks are issued by some of the world's largest and most successful companies.

Companies whose products are bought every day, such as McDonald's, Coca-Cola and General Electric. Blue chip stocks are considered among the safest equity investment available.

Utility Stocks - Utility stocks finance companies that provide water, gas and electricity. Utility stocks are considered one of the safest stock investments available because the demand for utilities is relatively stable and utilities are monopolies that are regulated by the government. Utility stocks are often invested in for the quarterly income they can provide.

Growth Equity Investments - The primary goals of growth equity investments are appreciation and inflation protection. These stocks assume more risk than growth and income equity investments but can offer greater potential reward.

Growth Stocks - Growth stocks are issued by new companies that need to reinvest most or all profits back into the business. Growth stocks pay small dividends or no dividends now in hopes of greater future growth.

Speculative Stocks - Speculative stocks are extremely volatile and offer a high degree of risk.. Options, commodities and penny stocks are all considered speculative. We believe the risk of these investments outweigh any rewards they may offer.

Please note you should always consult with a financial professional before investing to deem what is appropriate for an individual's risk and objectives.