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Guide To Investing in U.S. Equities

August 30, 2016

1 min read

America has the world’s largest economy*, and it’s the largest equity market in the world. This market includes all the stocks of publicly traded companies in the US.

But what, exactly, is an equity? An equity or a ‘stock’ represents an ownership interest in a company.

Think about it like this: most of the things that make companies valuable (technology, employees, ideas, audiences, and relationships) cannot be physically held in your hand. You own a piece of something greater, and because of that, ownership or partial ownership looks different. That’s why it’s called ownership interest.

It’s like you’re at the state fair and you win one of those bears from the top shelf that’s bigger than your body. The moment you won that bear you claim ownership over it. But it’s kind of impractical to walk around holding it all night long. So they give you a ticket stub that represents your ownership interest on the bear.

equities

Similarly, shares represent ownership interest in a company. Your shares are your ticket stub, which is your ownership interest in the company.

Here are three ways you can invest in the broad U.S. equities market on Stash:

1. Blue Chips: Some companies start as an idea but never make it out of the basement. Still others, start in a garage or a college dorm room and join the ranks of the largest companies in the world. Think Microsoft, Apple, and Facebook! These mega companies, called Blue Chip companies, are in a way like the Beyonces of the investing world.

2. Slow & Steady: The prices of investments go up and down on a second-by-second basis. Sort of like a rollercoaster – except, not all roller coasters are created equal. This investment seeks to avoid dramatic ups and downs, and it does so by investing in low volatility stocks.

3. Small But Mighty: Everyone loves the underdog – in life, love and even in business. All of the companies in this investment are small cap stocks, which means they’re the little guys. These small companies are striving for a serious growth spurt, which can make this investment more volatile than investing in more well-established companies.

By Erica Bentley

Investment Profile

Bonds Worldwide

An International Bond ETF on Stash

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Disclaimers

*According to GDP, http://databank.worldbank.org/data/download/GDP.pdf

Investing involves risk and investments may lose value. See our disclosures page for more information.

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.