What are securities?
Securities are investment vehicles like stocks, mutual funds, annuities and bonds. As securities, they reflect investments by various individuals and entities in a common enterprise, like a corporation, made with the expectation of deriving a profit. For example, a stock represents a share, or percentage, in a corporation’s profits and assets. By purchasing stock an investor is buying a percentage of ownership in a company. If the corporation makes higher profits, the value of its securities may increase and the value of a stock may increase. Shareholders make money by selling their shares of stocks at a price higher than the price when they purchased the stock. When a corporation loses money the value of the investor’s shares may decrease.
