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Different Types of Stock

The first thing investors are confusing is the different types of stock. This confusion leads to people turning away or making unwise investments in the stock market. You need to know what stock types are available and what that means if you want to play the stock market!

Common stock is a term often heard. Common stock. No matter what age, income, age or financial standing anybody can buy common stock. Common stock is largely part-owned in the business you invest. The value of your stock increases as the company grows and earns money. If, on the other hand, the company fails or fails, your stock value drops. Common shareholders do not participate in a company's day-to-day operations, but have the authority to elect the board.

Besides common stock, there are also different kinds of stock. Class A and Class B are often referred to in one company as individual stock classes. First grade, Class A, essentially gives stock owner more votes per stock share than owners of Class B. Since 1987, there has been the ability to create different shares in a company. Many investors avoid more than one class of stocks and not more than one class of common stocks.

Naturally, the most advanced type of stock is preferred stock. The preferred stock is not exactly a stock. It's a mixture of stocks and a mix of bonds. In the event of bankruptcy, the preferred stock owner can claim the company's capital and preferred stock holders receive the company's income before the shareholders. If you think you prefer the preferred stock, be aware that the company is normally authorized to buy the stock from the shareholder and stop paying dividends.