Understanding & Investing in Stocks


What is a stock?

When you invest in stocks, you own shares in companies. The value of your investments reflects how well those businesses perform. Stocks tend to react faster and longer to market swings, so investors willing to accept more risk may gain more capital appreciation.
  • Have historically realized higher rates of return over longer holding periods, though past performance is no guarantee of future results
  • Are generally appropriate for long-term investors
  • Carry higher growth potential and more risks than other investments
Read: Investing in stocks
Investing in stocks
Learn about ownership in public companies, stocks and how they are categorized.
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Merrill Edge Investing
Learn at your own pace with online courses that include:
  • Stocks versus other investments
  • Investing for the long run
  • Learn the lingo—Basic ratios

How stocks fit into your portfolio

Though past performance is no guarantee of future results, the long-term growth potential of stocks can grow the value of portfolios and outpace inflation, which are common objectives of clients who want to invest for college and retirement.
Play video: Asset allocation and your portfolio
Asset allocation and
your portfolio1 (1:48)
When deciding how to allocate your money among different investments, be sure to consider your goals, investment experience, time frame, liquidity needs, and your comfort level with risk.
Read: Tactical asset allocation
Tactical asset allocation:
Fine-tuning a longer-term strategy
Learn about this technique that helps you maintain an asset allocation strategy while making specific adjustments based on what you think will happen in the markets.
How to Build a Portfolio
How to build a portfolio
  • Consider your time horizon and comfort level with investment risk when choosing the proper asset allocation
  • Select diversified investments that align to your goals
  • Monitor your investments to help keep your portfolio on track
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You can take online classes that include:
  • The magic of compounding
  • Interpreting the numbers
  • A profile of investor Warren Buffett

How to choose a stock

Whether you're just starting out or seeking fresh ideas, Merrill Edge provides timely and relevant tools and resources to help you along each step of your investing journey.
Read: Building a better equity portfolio
Moving ahead:
Building a better
equity portfolio
Ways to take a more strategic approach to building—or rebalancing—your equity portfolio.
Play video: Investment risk
Investment risk (1:28)
Investing in the stock market is like riding a roller coaster. Realizing long-term gains can be rewarding, but sudden drops and wild market swings can be a little scary. This video can help you prepare for the ups and downs of stock market investing.
View a list of stocks definitions
Stock definitions
View stock definitions from our Glossary that include:
  • Day's price change
  • Marginable equities
  • Price/earnings ratio
  • Reinvest dividends and capital gains
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Advanced courses include:
  • The balance sheet
  • The fat-pitch strategy
  • Psychology and investing

Action items for equity investing

Identify your objectives, risk tolerance and time horizon
Decide which stocks match your investor profile
Explore the top equity performers
View equity research and insights from BofAMerrill Lynch Global Research, BlackRock, CFRA (powered by data from S&P Global) and Morningstar
Search for stocks
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Read more about market capitalization
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Related resources

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More you can do
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Investor education overview
You can learn about all of the investments we offer based on your level of experience, topic, or the resource format in the Investor Education learning center.
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1 Asset allocation does not ensure a profit or protect against loss in declining markets.

Investing involves risk. There is always the potential of losing money when you invest in securities.

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