Common stock is your ownership unit in the company.

What is the real difference between Shares and Stock?

In the investment world, the term “Stock” has a broader meaning, referring to a share of ownership in multiple companies. “Shares” is more specific, usually referring to units of ownership in a single company or mutual fund. When you buy stocks through the market, you gain a certain level of ownership in that company.

Common stock is the most frequently seen type, but there are many other types that investors should be aware of.

Why invest in stocks?

Investors have various reasons for buying stocks. First is to increase capital value. When stock prices rise, you can sell at a higher price and make a profit. Another reason is dividends. Many companies regularly pay dividends to shareholders. Additionally, shareholders have voting rights in company decisions, giving them the power to participate in the company’s future.

Companies issue stocks for new funding

When a company needs additional capital, it decides to issue shares to investors. This capital is used for various purposes, such as paying off existing debt, launching new products, expanding into new markets, or building new facilities.

How many types of stocks are there?

Common Stock (

Common stock is the main type used widely. Shareholders have voting rights and can receive dividends. Dividends vary depending on the company’s performance. If the company incurs losses, common shareholders may not receive dividends at all.

) Preferred Stock ###

Preferred stock grants special rights to shareholders, including priority in dividend payments over common shareholders. Dividends on preferred stocks are often fixed, providing more stability. However, preferred shareholders usually do not have voting rights.

Classification based on growth potential

( Growth Stock )

This type of stock comes from companies expected to grow faster than the average market rate. Investors buy because they believe the company will gain a larger market share. Growth stocks tend to be high risk but have higher profit potential.

Value Stock (

Value stocks come from stable companies that are in the late stage of their growth cycle. They are characterized by undervaluation relative to their intrinsic worth, low price-to-earnings ratios, and consistent dividend payments. Value stocks are generally less risky and less volatile than growth stocks.