Many people are making money with stock market. This is tempting and if you are planning to invest in stocks and want make money, stay for a while and develop batter understanding of different types of stocks and securities as stock market is a complex in nature and it is hard to learn about it without having fundamental knowledge of it. Investing in stocks without fundamental understanding and risk calculation may cause heavy loss. In this article and in coming articles, I will discuss about different types of stocks to provide batter understanding about stocks and stock market
Understanding types of stocks
As you know stock is a basic unit of owner ship of a public limited company. And there are two types of stocks first of all gather batter understanding about these two major types of stocks.
What are stock share terms?
Authorized, restricted, float, outstanding and unmissed these are all terms used for stocks and defiantly each type has its own attributes. An investor must understand all about them before investing in it.
There are two types of diversifications and both are used to reduce risk from investor portfolio. A batter understand about both type of diversification will help select the best.
Cyclical and non cyclical stocks
Cyclical and non cyclical are just having aggression and be defensive a good combination of both yield batter performance
Sectors stock classification
The companies having same type of business or area of operation are grouped together so you can classify stocks according to the business type. And it make easy to understand when you hear or read about a certain sectors stock activity
Dividends are the profit of the companies which is being distributed among the stock holder of the company. Investment can be made in the companies stocks who give away dividends
Stock split term is very romantic and some investors believe that this is a gift. But I personally feel it has no meaningful impact on the profit of an investor. Suppose you are holding stock of a company worth $80 per share and the company announces a split scheme 2 for 1. Now whatever amount of shares you were holding will become double but the worth will remain the same.
Importance of market Indexes
Index is the pulse of the market and one who keep eye on pulse will be aware about the market behavior mean if index goes up market is good and if index goes down market is not good
Stock exchange markets
If you have more knowledge you can do more so if you keep eye on major stock exchange markets you can grab more opportunities.
Predicting the future of the stock market with market indexes
As told before index is the pulse of the market and you can predict the behavior of the investors after market has operated for few hours index will reveal the thinking of investors and will make easy for you to select right stock for your investment