Stock Market has grown very much. It is very difficult for a person to enter into the world of stock market jargons. Many first time investors get confused and they could turn away from stock market altogether or even for worse could make unwise investments.

If you are planning to invest your money and trade in stock market, you should be well aware of the different types of stocks and what it all means !!!

I will try to explain some jargons here

Common Stock - It is a share f the company. Anyone can purchase common stock. By buying a common sock, you get part ownership of the company. As the company grows, the value of your stock increases. If the company goes bankrupt or perform poorly the stock value decreases. Common stock holde do not get involved in the day to day activities of the company but could vote to select the board of directors.

Class A & Class B Stock - Along with with common stock there are different classes of stock. They are often called Class A & Class B stocks. Class A stocks have more votes per stock than Clas B at the time of electing the board of directors. Many investors stay away from stocks with classes.

Preferred Stock - Preferred stock is not exactly stock. This is a mixture of stock and a bond. The owners of the preferred stock can claim the share of assets of the company if the company goes bankrupt. The preferred stock owners get profits before the normal stock owners get. But a company has the right to buy the preferred stock back from the owner at any time and stop paying dividends.

I will continue to write about various other jargons soon !!!

Filed under: Investment, Jargons, Stocks by admin No Comments »