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A
share of stock represents a unit of ownership in a company. Owning
stock entitles you to vote on important decisions concerning the
company. If the company distributes profits to shareholders, you
will probably receive a proportionate share. One of the main benefits
to owning stock is its liquidity, or the ease with which an investment
can be turned into cash. There are two types of stock: common
stock and preferred
stock. Common stock is, as the name suggests, the most
common type of stock that people own. Owning common stock gives
the shareholder the right to vote on issues concerning the company,
such as electing its board of directors. It also allows the shareholder
to receive dividends. Preferred stock typically has fewer rights
than common stock, however, its major appeal is that preferred stocks
usually pay consistent dividends, and it has priority over common
stock when it comes to paying dividends. One important thing to
keep in mind when investing in stocks is that while the potential
for rewards is greater, the risk involved is also greater than,
for example, putting your money in the bank. Additional
Resources: Money
101: Stocks click
here Investing
Basics: Stocks click
here Investing
in Stocks click
here
Welcome
to Stock Research click
here The
Investment FAQ: Stocks click
here Ohio
State University FactvSheet: Investing in Stocks click
here Morningstar.com:
Stocks click
here |
