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The Stocks Investment – You Should Know About Stocks

There are several different types of stocks investment opportunities that you can indulge in to make some well needed cash. However, you will need to know what your financial standing is before you make investments on the stocks market. In addition to this, you will need to assess and know what’s your risk comfort level and you should set long term financial objectives, as to what you would like to achieve by choosing a specific types of stocks investments. As a result of the many different stocks options available to you, you will need to plan exactly which type you intend to invest in, whether its long term financial securities or are you looking some short-term stocks to make some quick money. When you have carefully considered these factors and others, you should then be able to select some profitable stocks investment. Let’s look at some of the different types of stocks investment and there benefits.

Common Stock

Companies that trade publicly on the stock-market will offer stocks investment called common stocks. These types of stocks are extremely popular and if you buy them it will basically represent your equity ownership in a corporation. Depending on how the company performs, you will be eligible to make an income or a return on your stocks that you purchased. Also, if you hold a large number of stocks in a company, you will be entitled to vote for directors, participate in dividends declared and appreciation of share value among other important company matters.

Preferred Stock

Another type of stocks investment is preferred stock, these are equity which is a dual combination of both common stocks and bonds. The truth about preferred stocks are that they are not debts, but they still carry higher risks than that which is associated with bonds. If you are going to invest in preferred stocks, you should take note that they carry a fixed percentage on dividends and they are extremely sensitive to fluctuations in interest rates. An advantage of these stocks-investment is the fact that they are payable before common stocks, additionally, if the company goes bankrupt, preferred shareholders will be paid before common shareholders.

Blue Chip Stocks

The stock-investment which are called blue chip stocks are investment belonging to well developed and well established companies that have high levels of performance and financial stability. These companies also are financial viable having stable earnings and little or no extensive liabilities, which almost guarantees a return on your investments. Blue chip investment are some of the most valuable investment on the market, in addition to this, if you buy these stocks you can rest assured that you will get high returns due to their track record of always paying out regular dividends and giving their shareholders a sense of stability and financial safety.

Penny Stocks

These investment are low-priced, risky financial securities. Moreover, they are speculative financial instruments that are commonly traded over-the-counter. In other words, these investment are not traded on any of the major stock exchanges, but penny stocks are traded outside of these large exchange markets. If you choose any one of these stock and all goes well, you may be able to make lots of money.

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