The concept of Stocks and Bods appears quite in the arts and other manifestations of human intellectual achievement. The reason why it is consider as a Global Culture.
Global Culture: Stocks and bonds
Who among us wants to invest in Stock Market? All of us. Since owning a stocks has a lot of benefits including the claim of assets, capital gains as well as receive earnings from dividends, you have your freedom to vote for management changes if you think it is for the best and lastly is having limited liability. You now know all the profit you may gained from investing in stock market, so now I will tell you more what it is about so you may have your prior knowledge if ever you have your plans to take advantage of investing in it. Stocks represent shares of ownership in a trusted company, this share represent corporation's profit or assets and it van be quantified by dividing the number of shares owned by the number of shares issued. For example four rich guys formed a business and each of them contributing 10 million dollars, if the amount is equivalent to one share then each one owns 1/4 of the business.
If you are not included to that four guys, do not worry because there may be a chance for you to have your stocks to their business. How? Because there is a concept of stock trading where stocks are publicly bought and sold on a stock market. As a business grows, it faces challenges of raising enough money to finance its expansion and it is considered as option to sell a part of the business to investors...and maybe you are the lucky investor. If they issued you a stocks, grab it as a opportunity because if you accept it they will giving up to you a fraction of control.
You know now how to invest stocks but I know that you would also like to ask if there is such a thing that will serves as a proof that you are a stock holder and you owns a part o a business. And the answer is definitely yes. In the past global years certificates is given to those stockholder and this certificate contain details like corporation name and par value. But nowadays, growing number of companies issue paper stock certificates because it is easier to go all digital which is more convenient to both parties.
If it is still not clear to you, let me inform you that in stock you can make money in two different ways.
Earnings paid out to you in form of dividends
And an earnings shared to you if there is an increase in share price.
Nowadays it is more convenient to get stock quotes from the internet because of the regulatory changes we experience. A stock quote is the price of a stock as quoted on an exchange. It provides information such as its bid and ask price, last traded price, and volume traded.
Another information you may like about stock is its becoming a popular asset and it has distinct advantages compared to other types of investments.
Now let us talk about bonds and how it works with stocks. Bond is a a sum of money that is expected to be paid back with interest. It is another way for companies and corporations to raise the funds. They issue bonds to whoever wants to buy them, in return the corporation promises to pay interest payments for the length of the loan. You may notice that bond is also a kind of investment like stock. But there is a difference between the two and that is the stock is not a loans. Rather, it is a partial ownership in a company and the returns represent a share profits. Bonds on the other hand often have a fixed interest rate and a lower return. To make its statement shortly, bonds are dept whereas stocks are equity.
You will understand the huge difference of Stock and Bond by understanding the way you purchase it. In stock, if the investor purchased equity, he will become an owner in a corporation while in bond, if the investor purchased dept, he will become a creditor to the corporation. There is an advantage of being a creditor, that is a having a higher claim on assets than stakeholder.
After knowing what is bond and stock you can now compare and contrast the similar and differing characteristics of it. It is important before making a decision of investing.
Growing number of investor nowadays are actively pursuing others to invest by featuring their own success. But on the other side, still there will be a potential investor who are afraid to make an investment because of the fear of loss that they saw in someone experience or fear because they have the experience of losing huge money instead of gaining. So before you invest just make sure to have your faith that you will make it more not less.