Key - Personal


The ups and downs of ownership

Stocks, sometime called equities, represent ownership rights in a corporation. When you invest in a publicly traded company, you get a stock certificate that indicates how many shares of the company you own, and serves as your proof of ownership. Over the short-term, investing in the stock market can pose quite a risk. Over the long-term, however, stocks have earned higher and more consistent positive returns than any other financial investment.

Selecting Stocks

Besides the obvious decisions regarding investing in stocks – identifying and choosing the companies in which you wish to invest – there are other important considerations. These include deciding what purpose you want any returns to serve and what kind of stock ownership benefits you want.

There are two different types of return that stocks can yield:

Capital Gains

Most investors buy and hold stocks for long-term capital growth. If you sell your stock when the market price of the stock is higher than the principal amount you invested in it, you will realize a capital gain. Keep in mind, you'll typically experience capital gains tax if you pocket your capital gain.

Dividend Income

When a company experiences profit, they will often share it with their owners in the form of dividend payments. A dividend is a declared amount of money, decided by the Board of Directors, which is paid to owners for each share owned. The more shares you own, the more dividend income you'll receive if a dividend payment is declared. In this way, stock ownership can also serve current income purposes. Dividends are usually paid quarterly or annually, and the dividend amount may vary per period. If the company is not doing well, they may not declare a dividend at all.

As you consider the role of stocks in your portfolio, you'll need to decide what type of company stock you want:

Common Stock

This form of stock is the most prevalent, and provides stockholders with the right to vote for the members of the Board of Directors, attend Annual Stockholder Meetings and receive dividends.

Preferred Stock

Holders of this form of stock are not granted voting rights to elect members of the Board of Directors for the company; however, the company usually has to pay dividends to preferred stock holders before paying common stock holders. Another benefit of preferred stock is that you have priority over common stock holders in receiving some compensation, should the company liquidate.


When you invest in stocks, you expose yourself to an element of risk. In fact, stocks are considered significantly riskier than many other types of investment vehicles. With stock, the value of your shares directly responds to the company's performance – if the company is successful, your investment will typically increase in value, if the company fails, the value of your shares may fall beneath the amount of your principal investment. Additionally, domestic and international economic and political conditions can greatly influence the volatility of the stock market. Because of the daily fluctuation in stock value, investors usually buy and hold stock for its long-term growth potential rather than for any short-term goals.

Investment products are offered through Key Investment Services LLC (KIS), member FINRA/SIPC. Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA). KIS and KIA are affiliated with KeyBank National Association (KeyBank). Investment and insurance products made available through KIS and KIA are:

Not FDIC InsuredMay Lose ValueNot Bank GuaranteedNot A DepositNot Insured By Any Federal or State Government Agency

KIS, KIA and KeyBank are separate entities, and when you buy or sell securities and insurance products you are doing business with KIS and/or KIA, and not KeyBank.

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