What Are Stocks ?

In most simple terms stock can be defined as a share in the ownership of a company. If you are a Stock holder of any company It simply represents a claim on the assets and earnings of the company. Shares, equity, or stock, These all terms means the same thing.

Being Share Holder means Being Owner

Being Shareholders of a company's stock means that you are one of the owners of the company. Here Company means that an individual entity. Thus you have a claim to everything the company owns. Being stakeholders of the company What major rights do you posses ?

1.To receive the share certificates

2.Stakeholders may collect the annual report sheet, profit and loss account statement

3.Stakeholders have the rights to vote in annual general meeting of the company

4.Stakeholders have right to receive the dividends approved in annual meeting

5.Stakeholders may receive the corporate benefits like bonus, dividends

6.Stakeholders may inspect the registers of the company at the registered office

A stock is represented by a stock certificate. But in today's digital era you are not given the certificate because your broker keeps these records in the electronic form. This is done to make the shares easier to trade. History of stock market says, when a person wanted to sell his or her shares, that person physically had to take the certificates down to the brokerage and condition for trading was that Quantity and price of the shares must match. But now, trading has become more easy with a click of the mouse or a phone call.

If you are a stakeholder of any company it doesn't mean that you can interrupt or have a say in the ongoing business. For instance you are stakeholder of TATA STEEL. It doesn't mean that you can call Ratan Tata and suggest him how you think the company should be run. Rather you just have the rights as per the guidelines of the SEBI.

Types of Stock

1.Common Stock : Common stock is shares of stock. It means that the stakeholders who having common stock, may also have the rights on proportion of the company's dividends, voting rights, and earnings growth.Further these stocks are divided into two categories.

First one is Class A, Shareholders in this category are having the voting rights but other one Class B shareholders are not having these rights.

2.Preferred Stock : These stocks are given to particular individuals or institution. The only difference is that these shareholders are given priority when it comes to the company dividends.

3.Unlisted Stock : Unlisted stocks may be common or preferred but these are not listed in the stock exchange. These kind of stocks are generally bought in the secondary market. These stocks may be purchased in the direct placement.

Investment Strategies

1.Step I : If you are a fresher to this market it is highly recommended that you must opt the services of reputable brokers in the market. Make sure to have enough money to start with the broker's services. This way will not make you a expert of stock market though if you are busy with your daily full time job schedule you can entrust your broker to handle your all trading activities.

2.Step II : Get educated ! You can earn a lot about stock market by reading articles in the news papers. You can also opt for a stock market classes on line.

3.Step III : Read Research company's or individual's blog to develop and analyze your investing strategies. For Instance look up for Stock Tips

4.Step IV : If you are doing all the trade yourself you can start investing via buying the local companies stocks with which you may have the confidence and trust.

5.Step V : You must divide your whole investment into equal number of parts. If your stock is healthy and growing; Book your partial profit and hold the rest stock with a minimum stop loss.

6.Step VI : If your broker is not doing well with the trading activities i.e. If you are not earning as per your expectation. You must approach a research company's stock recommendations.