Common Stocks are equity ownership units in public corporations that trade on regulated exchanges. Each share of common stock represents a percentage ownership in the assets and economic profits of a specific corporation. Each business day, the stock exchanges meet and match up buyers and sellers of shares of the corporations to determine a market price. Over time, investments in common stocks have outperformed other market assets such as bonds.
Common stocks provide a good opportunity to grow an investment portfolio's value. As the assets and profits of the corporation grow, so too will the share price increase in proportion to the ownership interest represented by the share. Selection of well-managed growing corporations can create an investment portfolio that can grow over time and help an investor meet their goal.
Given the auction nature of the exchanges, a market price for a share may or may not represent the value of corporation. This disconnect between the market price and real value of a corporation can create an opportunity for an investor to purchase shares at an attractive price or sell the shares at a premium to the real corporate value.
RSA can help investors select those growing companies at attractive prices that will help build a growing investment portfolio.