The Simple Types Of stock in The Stock Market

After you are learning the notion of stock, the next step is to know the types of stocks that before you are going to invest the money on your own. Apparently, not all of the stocks are the same and the stock can be devided into two types of shares, namely Common Stock and Preferred Stock. Do you want to know the types of the stock in deeper? best trading sites is a site that you need to visit before you choose the other consideration of online trading shade. In general, the shares known to the public is the common shares, but there are actually two types of shares, namely:

– Common Stock

The common stock are the share that put the stock holder in the last option in the distribution of dividends and rights to assets of the company when the company is liquidated. This is due to the common stock owners do not have special privileges. The holder of ordinary shares will not obtain payment of dividends during the company does not earn a profit. Each share holder has voting rights in the general meeting of shareholders with the provisions of one share – one vote. Holders of common shares or stocks have limited responsibilities to the claims of other parties for the proportion of shares and have the right to transfer its ownership to another person.

– Preferred Stock

Besides the common stock, another stocks taht you need to know is the preferred stocks. The preferred stock are the stocks that have the characteristics of a combination of bonds and common stock, because it can generate a fixed income such as interest on bonds. This is due the right distribution of dividends regularly. There are three characteristics of preferred stock that make it similar to the obligations: there are the claim on earnings and assets previously, dividends remain for the duration of the shares, and it has the right to redeem and can be exchanged for common shares.

The advantages of preferred stock is safer than common shares. Because the preferred shares have the right to claim against the company’s assets and the distribution of dividends in advance, however the preferred stock has a weakness that is difficult for bought and sold like common stock, because the numbers are small.