Community Forex Questions
The different types of stocks available on the stock market
There are several main families of shares, which may differ from one another. There must be a clear distinction between registered shares and bearer shares. In the first case, your investment entitles you to be listed in the company's legal records and to reap additional benefits. The more common bearer shares are completely anonymous. Financial intermediaries trade them and are in charge of placing your stock market orders.
Another distinction is made between common and preferred stock. Ordinary shares grant you three types of rights: the right to vote at general meetings of the company, the right to profits (paid out as dividends), and the right to the net assets in the event of liquidation.
Preferred shares, on the other hand, do not give you voting rights; however, the payment of your dividends takes precedence over the payment of ordinary shares. Finally, there must be a distinction between listed and unlisted shares. Because their trading is governed by the financial markets, listed shares are subject to stringent regulations. Buying and selling prices for unlisted shares are freely determined by investors and are not always regulated in the same way as in traditional financial markets.
Another distinction is made between common and preferred stock. Ordinary shares grant you three types of rights: the right to vote at general meetings of the company, the right to profits (paid out as dividends), and the right to the net assets in the event of liquidation.
Preferred shares, on the other hand, do not give you voting rights; however, the payment of your dividends takes precedence over the payment of ordinary shares. Finally, there must be a distinction between listed and unlisted shares. Because their trading is governed by the financial markets, listed shares are subject to stringent regulations. Buying and selling prices for unlisted shares are freely determined by investors and are not always regulated in the same way as in traditional financial markets.
Stocks are broadly categorized into different types based on characteristics like size, sector, and growth potential.
1. Common Stocks: These are the most widely traded, giving shareholders voting rights and dividends, but with no guaranteed payouts.
2. Preferred Stocks: Holders get fixed dividends and priority over common shareholders during liquidation, but usually lack voting rights.
3. Growth Stocks: Issued by companies expected to grow faster than the market, these stocks typically reinvest earnings rather than paying dividends.
4. Value Stocks: These are undervalued by the market, offering potential for price appreciation as their true value is recognized.
5. Dividend Stocks: These provide regular income through dividends and are often issued by established, stable companies.
6. Penny Stocks: Low-priced, high-risk stocks of small companies, often with high volatility.
1. Common Stocks: These are the most widely traded, giving shareholders voting rights and dividends, but with no guaranteed payouts.
2. Preferred Stocks: Holders get fixed dividends and priority over common shareholders during liquidation, but usually lack voting rights.
3. Growth Stocks: Issued by companies expected to grow faster than the market, these stocks typically reinvest earnings rather than paying dividends.
4. Value Stocks: These are undervalued by the market, offering potential for price appreciation as their true value is recognized.
5. Dividend Stocks: These provide regular income through dividends and are often issued by established, stable companies.
6. Penny Stocks: Low-priced, high-risk stocks of small companies, often with high volatility.
Nov 17, 2022 20:45