Basic Stock Terms Defined
If you are considering investing in stocks then there are some basic terms that you should familiarize yourself with. The following outlines some terms you should know before you get into the stock market.
Share – A share of stock is a unit of ownership in a company. Besides profiting from your share you also get some say so in the running of the company. You have the right to vote on board members and some other matters.
Limited Liability – When you buy a share of stock you do not take on all the company’s liability. You are not liable under lawsuits or other actions.
Common Stock – The majority of sticks purchased offers the most rights.
Preferred Stock – Has fewer rights than common stock, but offers dividends.
There are many different terms that you will hear when you start working with stocks, but these are the basics that it helps to know before you start putting your money down.