Stocks – An Essential Part of Your Portfolio

In stock market, stock actually includes all the shares in which ownership of an organization is divided. A single share of that stock signifies fractional ownership in percentage to the whole number of shares existing in the corporation. The most common types of stocks are common stocks and preferred stocks. Common stocks are the stocks traded on the over-the-counter exchange like the New York Stock Exchange and the NASDAQ (national association of securities dealers) and they are usually traded in what are called the ‘over-the-counter’ traded offerings. Preferred stocks are those stocks which are listed on the pink sheets of a Securities and Exchange Commission exchange and are not traded on the Over-the-counter Market.

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There are certain advantages of owning stocks, the most important of which are capital appreciation and liability protection. Capital appreciation is that the value of stocks generally increases with the increase in the price per share. Liability protection is that your stocks may be sold in case of insolvency. It’s necessary that you keep a tab on the prices of your stocks to be able to make informed decisions regarding selling them or buying them.

When it comes to investments, there are two basic categories that you can choose from: Long-term and Short-term. Long-term investments are for those who are interested in building their portfolio over a longer period of time i.e. decades, while short-term investments are for those who want quick returns and want to make money right away. These investments can be made of stocks, bonds, mutual funds, etc.

There are many online firms that provide services pertaining to buying and selling stocks as well as financial planning and investing. A popular stock market newsletter is called the Stock Market Beat which provides recommendations based on research and current stock prices. An investor can further invest in specialized brokerage websites that offer specialized advice pertaining to stocks, options, mutual funds, etc.

With the increasing popularity of online trading, investing in stocks and shares has become much easier for the common man. All that you need to have is access to the Internet and a credit card. All the buying and selling of stocks takes place online, so all you need to do is invest in a company’s stocks. The benefits that this type of investment will have on your portfolio include added cash, higher asset value, more security and protection, flexibility, reduced risk, and increased portfolio growth.

One of the other great features of investing in stocks through an online firm is that there is no commissions involved. The only thing that you’ll have to pay for is the initial margin required. After which, you’ll be free to invest as you wish. Investing in stocks has never been so easy!