It’s About How Stock Works And Its Types

There are two ways stock investment product works, namely in general in a company and the implications for providing benefits to the owner. Meanwhile, you can also visit www.alphabetastock.com to find out more about stocks.

1. General Work Method

In general, the way it works in a company is:

Issue Shares

The company provides a number of these products, to raise capital. The issuance of shares is on the stock exchange, with a certain selling value.

Purchase

Interested potential investors will buy the proof of ownership letter. Usually using a broker or institution that can help smooth the process of buying and selling shares.

Value goes up

When the value increases, investors can sell it to make a profit on the difference between the selling price and the buying price.

2. How to Work For-Profits

So that you don’t get confused, check how stock works based on its impact on your finances.

Dividend

The profit you will get when the shares have maximum performance through the issuer you choose.

Capital Gain

Financial benefits are obtained due to the growing value of capital assets.

Many types of shares are circulating and owned by the company, some are divided based on their performance and abilities, namely:

Performance-Based

Income

The kind that can pay large dividends if managed properly.

Speculative

The type that can be sold and bought freely on the stock exchange because it has the potential to pay dividends.

Blue Chip

Shares owned by trusted companies among businesses, the price of this type is usually higher than other types.

Defensive

Shares from companies with stable purchasing power, even during times of economic crisis.

Cyclical

Is a type that is vulnerable to being affected by recent economic conditions.

Emerging Growth

The type that is usually owned by small-scale companies.

Growth

This type of development is very fast, dynamic in terms of prices increasing and decreasing every day.

Ability Based

Preferred

The profit value for the owner of this type is fixed, the owner will also be a priority for the results when a financial crisis occurs. The characteristics can be exchanged for common or common shares, by agreement between the shareowner and the buyer.

Common

This type can be claimed to be money adjusted for the profit and loss of the company that owns it.

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