SHARETIPSINFO >> Articles Directory >>What are the different types of shares in the stock market?
In earlier times when investments were not much in vogue, as in the present day, people hardly knew what a stock market was or how it did work. Nevertheless, in the present day, you will hardly find such ignorant people. The present day, is such that one can not afford to be a master of one. The world now has become so competitive that you will have to be a jack of all trade, whether or not you are master. In such a scenario, it becomes very important that we have even if little, but at least some knowledge about the world around us. We can start by learning the easier things at first and then moving on to the more complex ones. For example, when gathering knowledge about the share market, one should always start with the grass root level; say by simply learning what are the different types of shares in the stock market?
Do not be ignorant about the market
There is a vast difference between the earlier and the present day world and in order top survive in the present day world, one has to let go of the previous world, only then can he be successful in the present day. Earlier people did not give much importance to investments, as people at those times were not crazy after money, unlike people in the present day and as such having knowledge about investments were never considered important. We will not be wrong in saying this that, in the present day, people literally hankers after money. In fact, in the present day people do not run after money but instead after easy cash. Ignorance, about anything, in the present day, shall not be tolerated at any cost and to be in the race one has to have an up to date knowledge about every thing that is happening in and around him. In the present day, if a person does not know about the investment world, it is a sheer case of ignorance, which should not be tolerated at any cost. The present day, as we can all see, is the age of competition. There is cut throat competition in the world around us, for power, for money, for fame and the list shall go on and on. Therefore, if we really want to win the race, we should be better than the rest.
Getting the right knowledge
It is not humanely possibly for any person to acquire all the knowledge in a single day, as they, after all, Rome was not built in a day. One cannot gather all the knowledge in a day and as such, it will surely take time for any one to gather the required knowledge. As such, as already mentioned we should always try from the very simple things at first and then go on to the more difficult times. For instance we have cited the example of the different types of shares above, so why not start with it at first. There are various types of securities available in the stock market, which includes stocks, shares, debentures, bonds, etc and of these securities the shares can further be divided into preference shares and equity shares which are discussed as below. The shares in the stock market can very well be divided into two parts; equity shares and preference shares respectively. As the name very well suggest, preference shares holders have a preference over the equity share holders in terms of dividend. That is in other words, at the time of payment of dividend, the preference share holders have a preferential right over the equity- share holders and as such they will receive the dividends before it is distributed to the equity share holders. Now that we have already discussed about the preference share holders and their preferential rights in terms of dividend distribution, it is also necessary to throw some light on the equity shares as well. Equity share holders are the real owners of the company. Although they do not enjoy preferential rights in terms dividend distribution but they enjoy voting rights. At the same time, preference share holders are entitled to- dividends at a pre determined rate. Only after- paying off the preference share holders, the equity shareholders will be entitled to dividends that are left behind. Thus we now know what are the different types of shares in the stock market?
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