Investments: Characteristics Of
Stocks
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Stocks are interests in ownership of a company. If the company makes a lot of profit, or increases the value of its assets, the stock goes up. With losses, the value of the stock goes down.
Stocks come in different forms. For instance, there are different types of stock:
Common Stock: The basic type of ownership. Common stock usually has a right to vote about such matters as goals of the company, officers and directors. There is no guaranteed return to investors.
Preferred Stock: Is also a type of ownership, but usually has defined limitations. For example, it may or may not be voting. It may have a preferred right to receive dividends (profit of the company.) In the event the company is closed, preferred stock holders may have a priority over common stock holders.
When purchasing stocks, it helps to look to the company's history, current management and prediction for the future of the industry as well of the individual company.
You can purchase stocks individually through a Stockbroker, or through a mutual fund. To learn about mutual funds, see below.
You can find information about stocks on the company's web sites as well as a batch of internet sites. For example:
- www.investorhome.com - includes links and background information for each step in the investment process and all of the major asset classes such as stocks, bonds, real estate, venture capital, and collectibles.
- www.superstarinvestor.com - contains over 7.500 links organized by topics ranging from annual reports to technical analysis.
- www.morningstar.com
- www.aaii.com
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