What is a stock?
Posted on October 31, 2012 by admin
We know you hear about it all the time, though what is a stock you may wonder. Do not feel bad, alot of people do not really know what a stock is.
A stock is an ownership share in a corporation. Each of these shares denotes a part ownership for a shareowner, stockholder, or shareholder, of that company. Stocks are traded on exchanges all over the world, the largest is the New York Stock Exchange or NYSE. Stocks are identified by their ticker symbol. For example, General Electric is identified as GE. Investors can buy a share in companies, or a share of a diversified global portfolio of stocks. Individual Investors can purchase shares for themselves, at a brokerage of their choice, or direct from the company, wherever they have an account set up.
Investors classify stocks using several different means. One measure is the expectation investors have when they invest in a stock; another is the more quantifiable measure of size. Maybe that is to deep, let us back up..
Common stock represents the majority of stock held by the public. It has voting rights, along with the right to share in dividends.
When you hear or read about “stocks” being up or down, it always refers to common stock.
Despite its name, preferred stock has fewer rights than common stock, except in one important area – dividends. Companies that issue preferred stocks usually pay consistent dividends and preferred stock has first call on dividends over common stock.
Investors buy preferred stock for its current income from dividends, so look for companies that make big profits to use preferred stock to return some of those profits via dividends. We like these:)
Here are some good videos to help you really under stock and why you should use them to grow your wealth.
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