All companies' stocks are not alike in the value they return. Stocks have more, or less, market value depending on investor expectations in the marketplace about a company's earnings. Two key areas of risk are the volatility of the price movement and the potential that the company will lose value. The young woman I mentioned earlier got a hard lesson in loss potential early on. Volatility is a measure of risk in a security's price, running up when buyers bid for shares, and dropping when sellers offer more shares than buyers want to purchase.
Financial newspapers publish the high-low range for prices of stocks daily.
It's easy to calculate. Deciding how risky you want your return to be is a key consideration in selecting stocks. Although volatility introduces the risk that you might see a stock's high price decline, you're unlikely to lose all of your investment. Preferred stocks and common stocks represent mid-range loss potential. You can balance your risk by choosing quality stocks, which are stocks that have good earnings, carry low debt, show strong management, and have good market share.