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Stocks Education

Learn about investing in stocks

Understand the basics of stocks

What are stocks?

Stocks, also called equities, help drive growth in long-term portfolios. When you invest in stocks, you own shares in companies, represented by the number of shares possessed. The value of your investments reflects how well those businesses perform.

What are the different types of stocks I can invest in?

Common Stock

Common stock, simply referred to as stocks, as shares of ownership in a corporation. A stock in an instrument that signifies an ownership position, or equity, in a corporation, and it represents a claim on its proportionate share in the corporation's assets and profits.

Preferred Stock

Preferred stocks are capital stocks that provide a specific dividend that is paid before any dividends are paid to common stockholders, and that takes precedence over common stock in the event of a liquidation.

Growth Stock

Growth stock is company stock that is growing earnings and/or revenue faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion.

Value Stock

A value stock is a stock with a price that appears low relative to the company's financial performance, as measured by such fundamentals as the company's assets, revenue, dividends, earnings, and cash flows.

Restricted Stock

In a restricted stock plan, participants receive shares that are subject to certain restrictions from the company without cost or at a price determined by the company. They typically vest in increments over a period of several years. Dividends or dividend equivalent rights may be paid, and award holders may have voting rights during the restricted period.

Income & Preferred Stock

Income & preferred stocks are a fund that normally seeks a high level of current income through investing in income-producing stocks, bonds and money market instruments, or a fund that invests at least 65% of its assets in preferred securities, often considering tax code implications.

Common questions about stocks

If you're looking for more information, check out these responses to some of the common questions investors have about stocks

Want to learn more about stocks?

Whether you're looking to understand the basics of stocks or you're ready to dive into the technicalities, Merrill has the educational resources for you.

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Investing involves risk including the possible loss of principal investment.

Footnote 
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
Diversification and asset allocation do not ensure a profit or protect against loss in declining markets.

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Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp").
Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:
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