It’s nice to own stocks, bonds, and other investments. Nice, that is, until it’s time to fill out your federal income tax return. At that point, you may be left scratching your head. Just how do you report your investments and how are they taxed?
Businesses sell shares of stock to investors as a way to raise money to finance expansion, pay off debt, and provide operating capital. Each share of stock represents a proportional share of ownership in the company. As a stockholder, you share in a portion of any profits and growth of the company. Dividends from earnings are paid to shareholders, and growth is realized by the increase in value of the stock.
A successful investor maximizes gain and minimizes loss. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, here are six basic principles that may help you invest more successfully.
Recent market news — around social-media driven stock trading that created extreme price swings for shares of certain companies — may have you wondering whether you should jump into the excitement. Before you leap, you might consider this advice from legendary investor and teacher Benjamin Graham, considered the father of value investing: “The individual investor should act consistently as an investor and not as a speculator.” (1)
Why do so many people never obtain the financial independence that they desire? Often it’s because they just don’t take that first step — getting started.
You’ve identified your goals and done some basic research. You understand the difference between a stock and a bond. But how do you actually go about creating an investment portfolio? What specific investments are right for you? What resources are out there to help you with investment decisions? Do you need a financial professional to help you get started?
Every investment carries some degree of risk, including the possible loss of principal, and there can be no guarantee that any investment strategy will be successful. That’s why it makes sense to understand the kinds of risk as well as the extent of risk that you choose to take, and to learn ways to manage it.
Investing involves setting goals for the future and weighing the risks and potential rewards associated with a wide variety of investment opportunities. If you are a new investor, this might seem like an overwhelming task.
Armstrong Dixon
1500 Sulgrave Ave.,
Baltimore, MD 21209
443-563-1111
Armstrong Dixon is a private wealth management firm, founded in 2013 and headquartered in the Mt. Washington Village of Baltimore City, MD.
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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through ADE, LLC, a registered investment advisor. ADE, LLC and Armstrong Dixon are separate entities from LPL Financial.