What Are Shares
Make Money From Shares
13th Sept 2012
If you are searching for opportunities to make money , you would probably have
heard of the share market. In layman’s term, it is a place where shares or stocks are bought and sold. The
first step for anyone wishing to take this road to riches is to understand stocks.
The smallest unit of ownership in a company
is a share of its stock. Owning a share of a company’s stock means you are a part owner of the
As a part owner of the company you have
invested in, you are also given the right to vote on members of the board of directors to look after your interest
in the company.
The advantage of ‘owning’ a company this way
is the notion of limited liability. Should the company loses a lawsuit and must pay a big judgment, the creditors
cannot go after your personal assets, unlike being a partner or owning your private-held
There are two types of stock ,namely common
stock and preferred stock
Most of the stock held by individuals is
common stock.This represents the majority of stock held by the public. It has voting rights and the right to share
Preferred stock on the other hand has fewer
rights than common stock. However, preferred stocks have the advantage of dividends payment on a more
consistent basis. And if dividends are to be issued, preferred stock has the first call over common
Investors like to classify stocks by type of business and group them under different
sectors. This helps them to put the various companies in similar industries together for comparison purposes and
to diversify their portfolios. A diversified portfolio take advantage of short term gain from market changes and
protection from major market swing.
How do you
make money from stocks?
As a part owner of the company which you had bought stocks, you are then likely to
receive a proportionate share if the company distributes profits to shareholders.
The other way of making money with stocks is
to sell at a price higher than the price you bought. That is to buy low and sell high. The knife cut both ways
here. You can lose too when you sell lower than what you have bought.
In short, you make money from the dividends
issued by the company you invested in as well as when you sell your stocks at a higher price than you had
It has to be emphasized that it takes more
than just understanding the fundamental of stocks to make some money out of it. Many got their hands burnt
making the wrong investments while there are many too who make big fortunes out of it.
What Are Shares Classification
What Is Share Market?
Stock Investment For Beginners
How To Pick Your First Stock ?
Make Money From Stock
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