Stocks

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How do you make money with stocks?

If you own stock and the price of the stock rises (appreciates), you can make money if you sell the stock for more than you paid for it. Of course, if the price falls (depreciates) and you sell the stock, you lose money. In addition, some companies pay dividends — a distribution of profits in the form of cash or additional stock — to owners of common stock. If you own preferred stock, you are guaranteed regular dividend payments, and your dividend payments have priority over any dividend payments to common stockholders.