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A mini-guide to stock investment

To begin with, let’s discuss what stocks exactly are. Stocks are a part of a percentage that you own from the corporation. When you buy stocks, you become a sort of owner of the assets and profits of the corporation and that percentage of stock is titled under the owner’s name then. The person does not own the company or associate to its name but owns a stock that the corporation offered.

How to buy stocks?

Stocks are bought and sold in a large number every day via the stock exchange. You can refer to online platforms as well to buy stocks by visiting stockbrokers. These platforms make it easier to find what you want as they have whole listings available against every sort of stock you want to buy. If you want Marijuana Stocks, Car stocks, Cosmetic stocks, Food stocks, etc., there are online platforms to help you find the price and stock you want.

Reason for offering stocks

There are many reasons why a company will decide to offer stocks. They might need to pay a debt or to make money for some investment then they might release stocks for people to buy them and the resulting money will be used for the cause. Also, companies might be planning on launching a new product line or expanding their existing business. In such cases, people prefer to invest their money as they see the corporation growing.

Reason for buying stocks

Not only investors, but the general public also buys stocks for different purposes. In most cases, people only buy stocks to sell them at higher rates when the prices go up. There is a type of stock where the owner gets to have a part in different corporation-related events such as voting etc. They also get dividends if the company decides to distribute some profits among the stockholders, to encourage and appreciate their investment.

Different stock types

When you decide to invest in different stocks, you must know which type you are going for and you must know the privileges and risks of choosing a certain type.

Income stocks

These stocks act as an income source. If you own such stock, the corporation will give you the dividend more often and it might be scheduled as well. It will act as an income against your investment. Some companies may change the nature of the stock to income stock if the company makes a noteworthy profit and decides to reward its stockholders.

Growth stocks

These types of stocks have a rapid earning growth in comparison to the local market. Though these stocks do not coin many dividends but can be a good hope for capital appreciation.

Value stocks

Value stocks are usually bought at a cheaper price and are held by people to find the best time to sell the stocks when the prices go higher and a good profit can be gained.

Blue-chip stocks

Suh stocks coin dividends as well but are mostly offered by well-established corporations that are continuously growing.

Risks of buying stocks

Though there is a long list of benefits for considering investing your money in stocks, it can also be very risky because there is no guarantee that the value of the stock you bought will increase. Its value may go up and down with the condition of the company. Sometimes, when the company goes bankrupt, you might get nothing for the value you invested meaning your investment may go in vain.

Conclusion

There are a lot of benefits and variations in stocks which catch many people’s attention to invest the money as they consider it a reliable investment area. Though stocks can indeed be very beneficial for gaining monetary benefits but there are certain risks to the option as well. So a person must be very vigilant on how and which stock he should buy.

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