Stocks For Dummies
If you’re new to the stock market buying shares can be a puzzling experience. Most of the terms can be quite confusing and you’re almost always thrown straight into the deep end. So lets start at the beginning, a stock is the smallest piece of a company you can own. If you own a few stocks in a company you can claim to be part owner of the company itself. You can actually go to shareholders meetings and cast your vote in important matters. Well, they wouldn’t leave out an owner from things like that would they? If the company makes a profit they can redistribute this to their shareholders in the form of dividends. Most online brokers will let you reinvest this automatically back into the company so there’s no intervention required by you. This is a great way to let the value build up over time. If you leave it long enough you’ll be in for a nice surprise by the time you go back to check on your holdings.
There are also two types of stock available. These are common and preferred. Common stock is what you’ll mostly hear about if you turn on CNN and some stock prices are tumbling while others are soaring. This is the type of stock you would purchase from a broker in a company of your choice. If you have common stock you have the right to earn dividends as well as the right to vote in company matters. Preferred stock is a little different in the sense that you don’t have the same rights as you would with common. You will still receive dividends however.
In conclusion, I hope this acts as a good guide to stock investing for dummies. It can be extremely difficult to know where to start so it makes sense to take things back to it’s simplest form and define what is meant by stocks and shares.
Tags: stock investing for dummies, stock market buying shares
