Like corporations, the U.S. government and state and local governments issue bonds to obtain financing. The federal government sells bonds and securities to finance both the national debt and the government's ongoing activities. A municipal bond is a debt security issued by a state or local government. These bonds are classified as either general obligation bonds or revenue bonds. Basically, there are three ways to make money by buying common stock.
Most stockholders expect to receive dividend income.
Increase in Dollar Value. Stockholders can make money when the value of their stock increases. Stockholders can also profit through stock splits. As a corporation prospers and grows, its stock is worth more. A firm's preferred stockholders must receive their cash dividends before common stockholders are paid any dividends.