Common Stocks

Description
When you buy stock, you become part owner of a company. As an owner, you are usually entitled to voting rights and to a share of the company's profits, a portion of which are distributed in the form of cash dividends. Dividends are not guaranteed. They may be increased if the company performs well, but they may also be reduced or eliminated if the company performs poorly.

Objective
Stocks can be invested in for a variety of investment objectives, including current income, growth of principal or a combination of both.

Suitability
Stocks are well suited for long-term investors who recognize that in return for potentially greater rewards they assume greater risk.

Product Features

• Growth of Principal - Equity investments, such as common stocks, allow for growth of principal and increasing dividend income, usually as a result of increasing earnings per share.

• Potentially Higher Returns - Although past performance is no guarantee of future results, over longer periods of time, stocks have generally outperformed other financial investments and provided returns well above the rate of inflation.

• Risk - Risk is measured in terms of how much a stock price changes over a period of time. Some stock prices have a high degree of volatility, or risk, while others are more predictable and do not change much on a day-to-day basis.

• Tax Advantages - Under current tax laws, capital gains earned on long-term stocks are not taxed until the stocks are sold. In addition, if you lose money on a particular stock, up to $3,000 can be deducted from your regular income, and any remainder can be carried forward indefinitely.

• Liquidity - Stocks can be bought or sold on any business day at their current market value, which may be more than, equal to, or less than initially invested.

For more information, please contact your local financial advisor.

Edward Jones has research coverage on selected companies. Research reports are available to customers in printed form from their financial advisor. For prospective customers, please contact your nearest Edward Jones branch. Research is not available to the general public. Research reports and revisions to reports are made simultaneously available to all Edward Jones Financial Advisors through the firm's intranet, where they can be printed for distribution to customers and interested parties.