Stock Risks and Rewards

All stock ownership involves risk, although the level of risk can vary widely depending on the individual company you are investing in. Smaller companies tend to have a higher level of risk and may experience wider swings in share prices, while larger, more established companies tend to have less risk and may experience less volatility in share prices.

Remember, that as an owner of shares in a company, you have the potential to participate in both the success and failure of a company. Any company, large or small, faces the potential of having significant business problems, going bankrupt or even ceasing operations. If a business collapses, which happens to even the largest companies, your investment could become worthless. Many financial professionals recommend avoiding having a large position in any one stock or type of stock to help minimize this risk.

AARP Financial Inc. does not provide tax advice. Please consult a tax advisor for information pertaining to your particular situation.

The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, or legal, tax or investment advice, or a legal opinion. Individuals should contact their own professional tax or investment advisors or other professionals to help answer questions about specific situations or needs prior to taking any action plan based on this information.

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