You Must Know Before Investing in Stocks - Many people just don't want their money in the bank. They want it in a place where it will grow or multiply after some time. They want it growing with almost doing nothing, just wait it to be matured and use for your retirement ad expenses. For these reasons, investing in stocks is one of the very risky but with proper monitoring and decisions will even double or triple your money after a time. But what are the things to know about investing in stocks?
When you here the word stock market, New York Stock Exchange is always the thing that came to your mind. But what actually the things that comes to your mind when you hear stocks? How to put your money I there?
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Stocks are shares to the company. When you buy stocks or shares, it means that you owe a part of a certain company. But your stand in the company still depends on the number of shares you own. Only those with really big shares are the ones who really have access and knowledge on how the company is running. Usually, the price of each share is small, but the shares become big when you purchase many stocks. The many shares you buy, the bigger the chance of having a big return. When you purchase stocks, you are now called an investor.
There are two kinds of shares: the common and preferred shares. Investing in stocks under common shares is very risky because of the possibility of losing a part or all of your shares when a company stop or close for a certain reason. This is because common shareholders are ranked the lowest. Bond, preferred shareholders and creditors are the ones on the top list, thus, given the priorities of getting back their investment when a company stops operation.
Preferred shareholders attain a higher post than common shareholders. Have more part in the company decisions and running and can expect high dividends when company goes well. However, they still are below creditors when we talk about the number of shares or part of the company they own. They are also behind creditors in getting the investment back when the company encountered problems and needs to close.
There are ways of purchasing shares or stocks: You can purchase through a broker or through brokerage, or purchase through a Direct Investment or Dividend Reinvestment Company, Bank, or Plans.
The very first stock exchange in the United States was in fact done in Philadelphia and founded in 1790. The ever popular New York Stock Exchange was founded after two years and that is 1792. It is just so famous that all people think it all started in New York. But that is not true.
Another popular name in the stock exchange world is the Wall Street. It got its name when Dutch built a wall in that place in 17th century as guard from native attacks. After over thirty years, the wall was crashed down and built a street in that same place, then it is named Wall Street