Investing is recognized as one of the keystones of a solid financial foundation. In addition, your efforts to learn how to perform it can be achievable, rewarding, and justified.
The concept of investing may seem too sophisticated when it comes to certain technospeak and the rest of the gobbledygook noise around it. The huge number of online stock market tutorials do not make the overall picture clearer. What is a stock? What is the procedure to purchase it? What do we understand under the word trade? The stock market crashed. Ok, but what does that mean? The list of such questions can be never-ending. Nevertheless, the Stock Market is a perfect opportunity for everyone to earn extra money without having to work additional hours to make it.
Also, keep in mind that in case of an emergency, another alternative to get extra money quickly without working after hours is the online payday loans app.
Let us go further gradually and learn the basics of the stock market.
Contents
The Stock Market and Types of Stocks
The stock market is a platform where stocks or shares of enterprise ownership are sold, bought, or traded among a wide audience. Take note that the notions of shares and stocks are practically the same. The only nuance is that stock is a more common term related to part-ownership of different ventures.
Public Stock
The stocks are considered public when a public corporation makes its shares available for a wide audience to purchase them. There are two types of such public stocks:
- Ordinary shares or common stock. This particular type of stock allows the buyer to become one of the partial owners of a company. In this case, the enterprise and the buyer lose and earn money in equal proportions. In addition, a buyer obtains the right to vote on company business policy.
- Preference shares or preferred stocks. This type of stock grants the buyer with a fixed-return dividend. Thus, all investors obtain a preset percentage of income a company makes a year. For instance, when a person buys preferred stock for 100 USD that has a 7% yield, it will make a return of 7 USD at the end of each year.
Private Stocks
As it is understandable from the name, private stocks are private. It means that a wide audience cannot buy them, and therefore, the ownership of private stocks is limited to a small number of personnel or internal enterprise investors.
Selling and Purchasing Stocks
The most widespread way for people to purchase shares is by the creation of their personal brokerage account. People put their finances into a brokerage deposit to invest the money themselves or apply to licensed specialists to do that for them. Keep in mind that those who decide to create a brokerage account will likely have to deposit some amount of money into it first.
Different investment houses have their requirements for opening a brokerage deposit. They may require you to put either none or some minimum volume of your finances. For example, such investment houses as Credit Suisse, Goldman Sachs, Morgan Stanley, or JPMorgan require at least 500 thousand USD of equity investment in case you want to open a brokerage account in their establishments.