Stocks are similar to shares and they are equities which are issued by different companies to represent proportionate ownership interest. If you own a stock or a share of a particular company then you have a small ownership in the company whose shares and stocks you have purchased. Owning stocks can be very profitable for you as you can easily benefit from the dividends that are issued by the company.
The amount of the dividend issued often depends on the performance of the firm, if the company is making profits then you will earn good dividends but if the firm in incurring losses you will get a small amount of dividend. Stocks are more prone to risks as compared to bonds. In this article I would mainly like to tell you about different stocks in which you can invest your money.
1. Blue Chip- stocks
Blue Chip stocks are mainly those stocks which are often issued by well known firms and organizations. These firms have a good financial growth that is why they earn good profits and give out a good amount of dividend.
2. Common stocks
Common stocks are the normal investment tools which can be easily purchased by anyone. It is the most basic tool which a company issues. If you are investing your money for a long period of time then these stocks can be beneficial for you because they give you a higher rate of return as compared to any other investment tool. These stocks are prone to more risks and the dividend on them is always declared after the dividends on the preferred stock are declared.
3. Value stocks
Value stocks are also issued by well established companies but they are often under-priced. The companies that issue them have a good financial growth but they issue these stocks for the benefit of the general public.
4. Preferred Stock
Every person who purchases certain stocks of a company also gains voting rights but if you buy preferred stock you will get no such advantage. Preferred stocks come with a fixed rate of return and they can be purchased back by the company as and when desired. These investments tools are just like bonds and are often considered as debt rather than as equity.
5. Growth stocks
These stocks are only issued by those companies which have a good growth potential. Growth stock companies have good profits and earnings but they often pay low dividends and sometimes dividend is not paid at all.
Well these are some different type of stocks in which you can investment your hard earned money as and when desired.
Everybody wants to know about the good stocks to invest in. It would be nice to always be ahead of time and knowing that which stocks are going to offer the best returns in both the near future and long-term. Read more about how to invest in stocks.