A stock is a security that represents the ownership of a portion of a company specifically a corporation. Owning stocks in a company means that you own a fraction of its assets and earnings or profits. The amount of ownership you have in a company will depend on the number of shares you have.
Private entities and stock exchanges are places where you can buy and sell stocks.
Types of Stocks
There are two kinds of stocks.
- Commons Stocks: Common stocks represent the ownership in a corporation and owners of these stocks can elect the board of directors and participate in the making of corporate policies. Common stocks yield a higher rate of return over a period of time. Should the corporation go bankrupt? Common stockholders may not receive anything. This is due to the fact that bondholders and debtors must be paid in full before common stockholders get something.
- Preferred stocks: Proffered stocks are stocks that give higher dividends to their holders compared to common stocks. However, holders of preferred stocks have limited corporate voting rights. Preferred stockholders will have more rights to assets in case the corporation is liquidated. Although preferred stockholders have more dividends and are higher than common stockholders; their claim to assets will happen after bondholders and debtors are fully paid.
How do I buy and sell stocks?
You don’t need to go to the New York Stock exchange to buy and sell stocks in companies. In addition, individual stockbrokers are not necessary when buying and selling stocks. With modern technologies, everything can be done from your computer or smartphone.
You will need the following to buy a stock online.
- A brokerage account where you can buy and sell stocks
- Bank account to transfer money in your brokerage account
- Companies you want to buy shares in
- Number of shares you want to buy
Saved as a favorite, I really like your web site!
Thank you for your encouragement and support on our website. We really appreciate it. Have a wonderful day and happy investing.