What Happens When You Buy A Stock
Stocks have in past history earned their investors more money than other choices like money markets and bonds. Basically it's like you're buying a part of a business and investing in them. It's the case of you giving them money to do what they do; your payment is partial ownership of a company.
Most people will deal with what is called common stock. These are stocks that have no sort of restrictions to them, anyone can buy them. Be you a young investor or an investor who is older, common stock could well be the choice for you.
Buying of stock will place you as a shareholder in the company. This is just the way to say you've placed money into stock and now have some say in business decisions. As a business grows the cost of stock will increase, and you will earn money.
As part owner of the business you also will vote in decisions that are made for the company. You will vote when the board of directors is placed together, and you may well have a huge say in which way the company goes in many decisions.
Stocks can come crashing down too, and you will lose you money in some cases. Imagine all those people who had purchased stock in Enron, they have no money left now. So you need to watch carefully if you want to invest in stocks.
Different types of stock are available. As an example we will talk about a family owned company. If they may want to bring in extra funds they will create another class of stock. These stocks may only entitle the holder to one vote, while the class of stock the family holds will be worth 10 votes. However, they have found a way in which more money can come into the business. - 23229
Most people will deal with what is called common stock. These are stocks that have no sort of restrictions to them, anyone can buy them. Be you a young investor or an investor who is older, common stock could well be the choice for you.
Buying of stock will place you as a shareholder in the company. This is just the way to say you've placed money into stock and now have some say in business decisions. As a business grows the cost of stock will increase, and you will earn money.
As part owner of the business you also will vote in decisions that are made for the company. You will vote when the board of directors is placed together, and you may well have a huge say in which way the company goes in many decisions.
Stocks can come crashing down too, and you will lose you money in some cases. Imagine all those people who had purchased stock in Enron, they have no money left now. So you need to watch carefully if you want to invest in stocks.
Different types of stock are available. As an example we will talk about a family owned company. If they may want to bring in extra funds they will create another class of stock. These stocks may only entitle the holder to one vote, while the class of stock the family holds will be worth 10 votes. However, they have found a way in which more money can come into the business. - 23229
posted by X - Men @ 4:16 AM
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