Q: My parents gave me stock certificates for a graduation present. Is it a good idea to put them in a safe-deposit box and save them for retirement?
A: A safe-deposit box is a good way to store important documents, but a better option for stock certificates would be to place them in a brokerage account with a bank or brokerage firm. This will make it easier for you to buy or sell shares of these or other stocks. Also, you will receive statements showing the value of your shares and dividends.
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The stocks listed in the Dow Jones Industrial Averages are typically large-cap stocks . These stocks:
Are issued by a corporation with a large number of shares and a large amount of capitalization
Appeal to conservative investors because they are considered secure
Since small-cap stocks are issued by smaller, less-established companies, they are considered to be a higher investment risk.
large-cap stock stock from a corporation that has issued a large number of shares of stock and has a large amount of capitalization capitalization the total amount of stocks and bonds issued by a corporation small-cap stock a stock issued by a company with a capitalization of $500 million or less
The overall condition of the stock market will depend upon whether the market condition is a:
Next you should consider:
The company’s profits and losses
Other numerical measures of the company’s financial situation
bull market a market condition that occurs when investors are optimistic about the economy and buy stocks bear market a market condition that occurs when investors are pessimistic about the economy and sell stocks
To find out about the health of a corporation, you can use numerical measures such as:
Earnings per share
current yield the annual dividend of an investment divided by the current market value total return a calculation that includes the annual dividend as well as any increase or decrease in the original purchase price of the investment