Enter the warehouse, please. There’s a wealth of information to look at. Yes, it’s a big place. But, you know, when dealing with financial stocks, you got to know the basics. So here’s the “stock” information. Make room in your head for it, please.
The definition of “stock”: it is the smallest unit of ownership within a company. That means if a person actually owns some “stock” in an organization, that person has partial ownership of the organization. Which means any profit the organization earns, the stockholder earns as well.
Traditionally, stockholders have a right to vote on matters regarding memberships within the board of directors of the company itself. A company can distribute profits, and stockholders will receive a proportionate share. Sounds fair and easy and not terribly exciting, but the REAL benefit to turn your head and do a double take is the fact that standard stock holding comes with a limited liability. What that means is if the company loses money (case in point, a hefty lawsuit, for instance), a person’s stock will only dissolve without any obligation to pay it back or deliver collateral. In essence, the stockholder is protected from loss.
Now keep this in mind; there are two types of stock: preferred and common. What common stocks represent is the majority held by the public. That includes a share in dividends and voting rights. Preferred prioritizes dividends on a much higher level; however less rights are available for holders.
Stocks generally have a characteristic that is beneficial to a holder, and that is called “liquidity”, which is the ability for an asset or share in stock to convert easily into cash and to be traded back and forth easily without any loss of time. In other words, stocks are easily manageable and convenient for both the buyer and seller.
There’s much more to know about stocks; but this is the basic knowledge for you. Stock information. Remember it clearly.