References:

S&P 500

Transcript:

Stocks are the most common and accessible long-term investment. A stock represents a portion of ownership in a corporation. A stock is also referred to as an “equity”, because of the ownership nature of the investment - similar to how you build “equity” in your home. 

Some companies pay dividends to their stockholders, which is income that is paid to you, typically every quarter. That income is taxable to the stockholder when it is received.

One of the main advantages of investing in individual stocks is that you control when to recognize capital gains. Capital gains are the difference between the amount invested and the proceeds from the sale. Your tax rate will depend on how long you held the stock before selling.

If you own individual stock in your brokerage account, chances are you're going to receive company communications, proxy voting information, and if there is a shareholder meeting every year, you will also receive the materials for that meeting. 

By recommending and voting on decisions proposed by the board of directors, you have an opportunity to influence the direction of the company! Now, if you only have five or ten shares of stock from a particular company, you may not have enough voting power to steer a decision, but it allows you to share your views as an owner of the company.

The stock market as a whole will go up and down every day. See this chart illustrating market returns over 30 years. You will see significant drops along the way, but over the long term, it trends upward.