Know More about Shares and its Types

by Traders Gurukul Stock Market Training Institute

Investment in stocks is one of the most challenging and demanding tasks. This is because it is surrounded by instabilities and it’s quite unpredictable too. Stocks and shares are one of the well-known financial businesses. It refers to the ownership certificates or agreements of a company. When you are buying stocks, you are basically buying a portion or fraction of a company. Investing in shares can lead to a great amount of profitable earnings but it equally comes with risks as well. There's a notable saying, ‘higher the risk, higher the profit.

The stock market originally came into the picture by the Dutch. It began when the new-world countries started trading. In India, the first stock market was established in Bombay in 1875. It is one of the oldest stock market in the whole of Asia.

The business of shares requires a high level of proficiency, awareness and complete insights into the investment profession. It is one of those analytical businesses, which is based on technical analysis and risk analysis. It is full of probabilities and possibilities and is not entirely certain in any way. For such types of business, one needs a clear understanding of the subject. Nowadays, there are many share market courses online. These courses are either short-term or full-time courses. A good amount of knowledge is offered by these courses regarding the subject. A person entering this field should for sure take up these courses. Here, the professionals share the secrets of the industry. They give proper guidance to the students on how to increase their profits and how to invest appropriately.

There are two different types of shares:

Equity: A person who is an equity shareholder gets to carry the fractional ownership of a certain company. It is advantageous and beneficial for an equity shareholder when the company earns profits. Along with this, an equity shareholder also gets a hold in the company's management and administration. Moreover, he gets voting rights as well. However, here, the returns are uncertain and keep fluctuating and are irregular.

Preferred: Exactly like the former, the preferred shareholder also holds the ownership of a portion of the company. As far as the distribution of dividends is concerned, the preferred shareholder gets an advantage and preference over the equity shareholder. However, a preferred shareholder does not get any kind of hold in the company’s management and, on top of it; even the voting rights are also not given to him.

A person needs to completely prepare himself while entering this field as this business is filled with greater profits as well as losses. The analysis and calculations must be made very carefully and cautiously. A person must keep himself updated with the ongoing and current fluctuations in the market price.

There are ups and downs in this business and a person must stay tough and competitive throughout. This is exactly what this business demands.

A person can make a lot of money by investing in stocks and shares but the new investors need to keep it a little slow at the start.