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Of all the investment alternatives available, no investment gets more public attention than common stock. People from all walks of life watch the market’s ups and downs with emotional concern and enthusiasm. The market is sometimes considered a barometer for the mood of the economy.

The news media consistently uses the Dow Jones Industrial Average or the S&P 500 as an indicator of business health. One reason is that the raw numbers do not require in-depth explanations. Reporting market fluctuations is suitable to "sound bite" reporting.

WHAT STOCK PRICES TRULY INDICATE

Stock or equity investment represents the right to be a stockholder or owner in a corporation. As a business becomes incorporated, it sells shares to investors, who can be private or public. We are most aware of public investing through the secondary market that operates at the stock exchanges, such as the New York and American.

The equity market is available to every type of investor willing to assume some level of risk. You can be an active trader, a long-term capital gain investor or a conservative investor looking for dividends and growth to offset inflation.

We have seen bull markets (periods of rising stock prices) and bear markets (declining prices). Although the Great Depression is still fixed in some people’s memories, the market still has an appeal to young and old alike.

However, before investing in the market, an investor should have provided for a home, savings reserve, adequate life insurance and enough sources of income to cover the basic needs and wants in life, then develop a common stock investment program.

When investing in common stocks, the prudent investor realizes that it is just as important to sell at the right time as it is to purchase at the best time.

         Fair to excellent depending on the economy and psychology of the market place.

        Poor to good. Depending on price versus dividend or yield factor.

        Fair. Markets can be volatile

        Good. Most stocks are traded in a routine manner on a daily basis.

        Fair. Deferral of capital gains until sale of stock.

INVESTOR RISKS

Stock shares can be bought with minimum expense, but there are always sales charges for buying and selling. Stocks give an investor great leverage and can be used as collateral. Time and expertise in stock selection is needed in order to match the stock with the goals and objectives of the investor.

Securities offered through Sigma Financial Corporation. A registered broker/dealer. Member FINRA & SIPC.

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Last modified: 11/04/07