Invest It
Plan It
Earn It
Play It
Kids Parents Teachers
 WHAT'S A STOCK?

A stock represents a little piece of a company and is bought and sold in units called shares.

When you buy a share of stock, you become part owner of the company. If the company does well, either by making money now or by doing things that other investors think will help it make money in the future, the value of your stock may go up. If the company does poorly - losing money, announcing job cuts or predicting that it won't earn as much money next quarter as it did last quarter - then your stock price may drop. Sometimes, a company will decide to pay a dividend on its stock. A dividend is a share of the company's earnings in the form of a cash payment.

There are two general categories of stock. Most stockholders own common stock in a company. These stockholders have the right to elect the company's Board of Directors. A board of directors helps ensure that the company's management makes decisions keeping in mind shareholder interests. The other category of stock is preferred stock. Like owners of common stock, stockholders with preferred stock have an ownership stake in the company. However, owners of preferred stock usually don't have the right to vote for the board of directors. Also, many companies pay a dividend on its preferred stock. Stockholders of preferred stock get paid their dividend before holders of common stock.

Regardless of what type of stock a person owns, all stockholders receive a company's annual report. This important report details the company's financial health and may provide information on the company's achievements during the year and plans for the future.



 
 
Please consider the objectives, risks, charges and expenses of any Columbia fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about the fund. You should read it carefully before investing.