What do stocks have to offer?

Common stock enables you, the investor, to participate in the profits of a firm. Every shareholder is a part owner of the firm and, as such, has a claim on the wealth created by the company. This claim is not without limitations, however, because common stockholders are really the residual owners of the company.

That is, their claim is subordinate to the claims of other investors, such as lenders, so for stockholders to get rich, the firm must first meet all its other financial obligations.

Accordingly, as residual owners, holders of common stock have no guarantee that they will receive any return on their investment.