What Are Domestic Stocks?

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Domestic stocks are used by companies that operate and are affected by what happens in the United States. Find out how a company that invests in companies overseas will no longer have domestic stocks with help from a licensed financial planner in this free video on the stock market and investing.

Part of the Video Series: Stock Market
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Video Transcript

Hi, my name is Bill Rae. I'm with Alumni Financial Services. I've been in the business and the finance world for well over 20 years, and your question is: What are domestic stocks? It's an excellent question. Let's step back and, first of all, tell you we're not soliciting or offering stock advice here. With that in mind, you should also get a general understanding that what is a stock? A stock, in its simplest explanation, means a part ownership, if you will, of a company. For instance, if I owned a company and I needed money to buy equipment to expand or to hire folks, I could either borrow it through a bank or a bond or I could go out and sell to you privately or to the general public. And that, by issuing a value in my company, is a stock. So what is a domestic stock? In today's environment, a domestic stock would generally mean that my company operates and is affected by what happens here in the U.S. And there are so many ways that can happen. If you're talking with a brokerage house, they may have a fund that deals only with companies such as if I had a company here in America and there were 10 of us that worked only in America. That would be a domestic stock or a domestic fund versus if I were investing in companies that operated out of Europe or Asia. That's a general domestic stock, if you will, in its simplest explanation. But as in everything, we urge you: Sit down with a licensed professional. Do your homework. If you're going to put money in, make sure you understand what's expected of you, what the fees are, when and how you can get your money back, and what is your expectation of growth or loss. What are the risks? My name is Bill Rae, I'm with Alumni Financial Services, and as always, we're here to help you build wealth.

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