Investing in stock is particularly important to young people. Historically, the return on investment for stocks has been much higher than other investments. Therefore, stock ownership gives you a better opportunity to build wealth and stay ahead of inflation.

The stock market isn’t right for everyone. It depends upon your risk tolerance which is somewhere between two extremes:

• High tolerance for risk means you’re able to cope psychologically with an investment that may be highly volatile. A volatile investment is one that has a tendency to have large gains or losses in value.
• Low tolerance for risk means that you’re uncomfortable owning an investment that fluctuates significantly in value.

Not all investments in stock are volatile. You can find stocks that are less likely to drop precipitously in value. They might not soar in value either.

Evaluating Stocks >>