Stocks or Equities are share issues that are on offer to the public from PLC companies.
The security signifies ownership in a corporation, by ownership of a share certificate, and represents a claim on part of the corporation’s assets and earnings.
A share has a purchase value, that fluctuates, which entitles the holder to a fixed dividend (when applicable), whose payment takes priority over that of ordinary share dividends.
Usually entitles the owner to vote at shareholders meetings and to receive dividend payments on company profits.
Generally does not have voting rights however, has a higher claim on assets and earnings than common shares.
Owners of preferred stock will receive dividends prior to common shareholders and have priority in the event that a company becomes insolvent and is liquidated.
Equities are different to CFDs in the respect that,
When you purchase a number of shares you will pay market value at that time
There is NO leverage or margin, the per unit price x the number of shares, is the total cost of your investment. (+ a small Brokerage fee)
Once you have completed the transaction, you are now a shareholder (part owner) of the company you have chosen to invest in.
Ownership is determined by the number of shares a person owns relative to the number of issued shares.
If a company has 100,000 shares of stock outstanding and one person owns 10,000 shares, the investor would own and have claim to 10% of the company’s assets.
Stocks are the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the longer term.