Investing in Stocks

Stocks represent ownership in a company and are traded on stock exchanges. They can offer high returns but come with higher volatility and risk compared to fixed income investments. Understanding company fundamentals and market trends is essential for successful stock investing. Stocks are a type of security that gives stockholders a share of ownership in a company. Companies sell shares typically to gain additional money to grow the company. This is called the initial public offering (IPO). After the IPO, stockholders can resell shares on the stock market. Stock prices rise or fall and are typically driven by expectations of the corporation’s earnings, or profits.

Categories of Stocks

• Individual Stocks: Investing directly in shares of specific companies allows for targeted exposure but requires thorough research on company performance and market conditions.


• Stock Market Indices: Indices like the SP 500 or Dow Jones Industrial Average track the performance of a group of stocks, providing a benchmark for market performance.


• Stock Funds: Mutual funds or ETFs that invest in a diversified portfolio of stocks can reduce risk while providing access to various sectors and industries.


• Dividend Stocks: Companies that distribute a portion of their earnings as dividends provide investors with regular income in addition to potential price appreciation.


• Emerging Markets Stocks: Investing in stocks from developing countries can offer high growth potential but comes with increased risk due to political instability and market volatility.

How to Purchase Stocks

At GS Fund Holdings, we offer several common methods for purchasing stocks:

1. Direct Stock Purchase Plans Many companies provide the option to buy or sell their shares directly through their own channels, eliminating the need for a broker. Note that some companies may restrict these plans to employees or existing shareholders and may have minimum purchase requirements.


2. Dividend Reinvestment Plans (DRIPs) These plans enable you to acquire additional shares of a stock you already own by reinvesting your dividend payments back into the company. To participate, you’ll need to enter into an agreement with the company. Be sure to check with the company or your brokerage to determine if there are any associated fees for this service.


3. Discount and Full-Service Brokers Brokers facilitate the buying and selling of shares on behalf of clients for a commission fee. Many brokers offer online platforms where you can easily purchase stocks.


4. Stock Funds Investing in stock funds is another effective way to gain exposure to equities. These mutual funds primarily invest in stocks and can be purchased directly from investment companies or through a broker or financial advisor.

At GS Fund Holdings, we are here to guide you through the stock purchasing process and help you make informed investment decisions.