Stocks
Ownership shares in public companies — the core growth engine of most portfolios.
A share of stock is a slice of ownership in a business. Its long-run value tracks the earnings that business produces, while short-run prices swing with sentiment, rates and news.
A share of stock is a slice of ownership in a business. Its long-run value tracks the earnings that business produces, while short-run prices swing with sentiment, rates and news.
Most investors get stock exposure through diversified funds rather than picking individual names, because a handful of winners drive the majority of the market's return.
Key concepts to master
- 01.Total cost of ownership, including fund fees and platform fees
- 02.Liquidity: when, and on what terms, you can get your money back
- 03.Tax treatment and which account type this belongs in
- 04.How this exposure overlaps with what you already own
Common mistakes
- ×Sizing a position based on recent performance rather than a written plan
- ×Confusing infrequent valuation with genuine stability
- ×Ignoring the tax drag of frequent trading in taxable accounts