A stock is a security which shows ownership in a publicly traded company. They are sold by the share. Each of these shares denotes a part ownership for a shareowner or shareholder of that company. Stocks are traded on exchanges all over the world with the largest being the New York Stock Exchange, NYSE. Stocks are identified by their ticker symbol. For example General Electric will be identified as GE. Individual Investors can purchase shares for themselves, at a brokerage of their choice, wherever they have an account set up. There are different types of shares, common and preferred. Most shareholders will purchase common stock. The goal is for the price per share to increase over time so the investor can have a profit that beats monies in Treasury bills or beats inflation. Over time stocks have outperformed cash and bonds, this takes into account depressions, world wars, and other world changing events.
[edit] Common Stocks
Common stocks, also known as ordinary shares and common shares, are stocks that grants the holder a proportion of the company's dividends and voting rights. Stocks that are traded and bought by retail investors are usually common stocks. This kind of stocks reflect the basic ownership of the company and is subordinate in claims to preferred shares and other dilutive securities.This is because by purchasing a common stock, you are effectively an owner of the company which makes you a servant to other investors who has a claim on the company through debt or derivatives.
[edit] Preferred Stocks
Preferred stocks are special stocks sold to particular institutes or individuals which grants the holder priority over common stocks in terms of dividends and bankruptcy claims. The drawback is that preferred stocks usually have no voting rights.
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