The price of a stock will go up or down over time. When it goes up, shareholders can choose to sell their shares at a profit.
Many companies pay dividends to their shareholders, which can be a source of tax-efficient income for investors.
he ability to vote means shareholders have some measure of control over who runs the company and how.
Get in Touch
Typically, common shares can be bought and sold more quickly and easily than other investments, such as real estate, art or jewellery. This means investors can buy or sell their investment for cash with relative ease.
Advantageous tax treatment
Dividend income and capital gains are taxed at a lower rate than employment income and interest income from bonds or GICs.
Reliable income stream
Generally, preferred shares come with a fixed dividend amount that must be paid before any dividends are paid to common shareholders.
Key Benefits of Investing In Stocks
Stocks can be a valuable part of your investment portfolio. Owning stocks in different companies can help you build your savings, protect your money from inflation and taxes, and maximize income from your investments. It's important to know that there are risks when investing in the stock market. Like any investment, it helps to understand the risk/return relationship and your own tolerance for risk.
Let's look at three benefits of investing in stocks.
Build. Historically, long-term equity returns have been better than returns from cash or fixed-income investments such as bonds. However, stock prices tend to rise and fall over time. Investors may want to consider a long-term perspective for their equity portfolio because these stock-market fluctuations do tend to smooth out over longer periods of time.
Taxes and inflation can impact your wealth. Equity investments can give investors better tax treatment over the long term, which can help slow or prevent the negative effects of both taxes and inflation.
Some companies pay shareholders dividends1 or special distributions. These payments can provide you with regular investment income and enhance your return, while the favourable tax treatment for Canadian equities can leave more money in your pocket. (Note that dividend payments from companies outside of Canada are taxed differently.)