What You Should Know About Stocks

Stocks are all the stocks held by an entity in which ownership is controlled. In common American English, all the stocks are known as "stock." A single share of this stock represents fractional ownership in proportion to its total number of outstanding shares.

Stocks and bonds differ primarily in the manner in which they are traded. Penny Stocks generally trade on U.S. exchanges while bonds are traded on foreign exchanges. Foreign exchanges are particularly significant for bonds because many governments issue them. Bond trading is a highly regulated sector and requires regular filings and record keeping by the various companies involved in order to insure the proper treatment of their securities and comply with applicable securities laws.

An important feature of stocks and bonds is that both types of securities can be bought and sold legally by a company and by an individual investor. There are several major differences between stocks and bonds that should be considered before making an investment decision. First, stocks are considered open ended while bonds are closed end. The length of time a security remains outstanding also affects the profit or loss gained on the sale.

Since stocks are generally traded publicly, anyone can buy them. This makes them attractive to individual investors who are looking to increase their portfolio equity. Stocks can be purchased from any major stock exchange in the United States or Europe. Foreign countries may also have stocks available for purchase. These include Asia, Japan, South Korea, and Germany.

Because they are traded publicly, stocks can be purchased at any time. Bond buying and selling is only possible when the specific bond has specific requirements such as a minimum maturity date or certain minimum distributions. When these requirements are met, then the corporation becomes eligible to sell its shares to investors. Stocks can't be purchased until after the specific expiration date on the option. For example, when a bond holder decides to buy stocks, he must first select a company with a good financial record.

Before making any type of stock investment, an investor should educate himself about the different types of stocks and the pros and cons of each one. The type of stock an investor chooses depends largely on his goals and objectives. An investor can choose to invest in stocks based on current market value or future income potential. In addition, there are some specialized types of stocks that are not related to traditional businesses. For example, a real estate investor will most likely purchase stocks based on the potential profit a property may generate over time. With stocks, there are many factors to consider before making the final decision.