Stocks Basics: Conclusion
Let's recap what we've learned in this tutorial:
- Stock means ownership. As an owner, you have a claim on the assets and earnings of a company as well as voting rights with your shares.
- Stock is equity, bonds are debt. Bondholders are guaranteed a return on their investment and have a higher claim than shareholders. This is generally why stocks are considered riskier investments and require a higher rate of return.
- You can lose all of your investment with stocks. The flip-side of this is you can make a lot of money if you invest in the right company.
- The two main types of stock are common and preferred. It is also possible for a company to create different classes of stock.
- Stock markets are places where buyers and sellers of stock meet to trade. The NYSE and the Nasdaq are the most important exchanges in the United States.
- Stock prices change according to supply and demand. There are many factors influencing prices, the most important of which is earnings.
- There is no consensus as to why stock prices move the way they do.
- To buy stocks you can either use a brokerage or a dividend reinvestment plan (DRIP).
- Stock tables/quotes actually aren't that hard to read once you know what everything stands for!
- Bulls make money, bears make money, but pigs get slaughtered!
A type of security that signifies ownership in a corporation ...
The market in which shares are issued and traded, either through ...
A class of ownership in a corporation that has a higher claim ...
A type of preferred stock with a higher claim on assets and dividends ...
Securities such as stock options, warrants, preferred bonds, ...
The market in which shares of publicly held companies are issued ...
Discover the basic information about the equity, or stock, market and the two primary classifications of equities that are ... Read Answer >>
Understand the characteristics of common stock and preferred stock, the two ways by which companies obtain share capital ... Read Answer >>
Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ... Read Answer >>
Understand who can purchase common stock as well as the key characteristics that differentiate common stock from preferred ... Read Answer >>
You don't get a direct say in a company's day-to-day operations, but, depending on whether you own voting or non-voting stock, ... Read Answer >>
Discover how a company can break down its common stock into multiple classes and how these classes differ from one another ... Read Answer >>