- Owners of common stock are owners of the company and are entitled to vote at the annual shareholders meeting.
- As time passes and businesses grow they typically become worth more. If you buy a share of a company at $10 and the business grow, another investor may be wiling to pay you $13 to buy that stock. When you sell you realize $3 of capital appreciation, or a capital gain.
- Common stockholders are eligible to receive dividends from the company's accumulated profits, if it chooses to distribute dividends. Not all public companies issue dividends.
- Common stocks are traded daily. Because of this they are considered liquid securities. At any time the ownership interest can be sold for cash.
- Common stockholders retain a larger part of a company's risk than bondholders do. Because of this the expected return on common stock is greater than that of bonds.
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