The type of stock is important to know if you want to raise money by investing. However, before investing, investors should know in advance what types of shares are on the market. It’s because the stock investment is not just pouring money to buy shares of a company. You need an ingenious strategy to make a lot of money by investing. Aside from that, we also recommend you to read more investment news so you can find more chances to reap profits while also avoiding bad investments at the same time.

As is known, investment in shares is known as a high-risk high return, which means the profit and risk are equally large. So, if you make a wrong move, your money will be sold out in an instant. Surely you don’t want to experience this, right?

So you can avoid wrong decisions, here are some types of stocks that novice investors need to know:

Common stock

Common stock is a common stock that is traded on the capital market. So, investors have the right to claim ownership in the assets and income of a company.

If the company makes a profit, then you as a shareholder will also be sprayed of results. Vice versa if the company goes bankrupt, then you will bear the loss of the number of shares you have.

Preferred stock

Preferred shares are a combination of bonds and ordinary shares. Many investors choose this type of stock because it can generate fixed income.

Its characteristics are also the same as ordinary shares, where shareholders can make claims on profits and get fixed dividends and have redemption rights.

Bearer stocks

This type of stock is not written the name of the owner. The goal is simple so that it can be easily transferred to other investors or resold.

Registered stocks

Registered stocks or shares in the name are the opposite of shares on the show or bearer stocks.

The reason is that the shares have names of shareholders that are clearly written on a piece of paper. If you want to make the transfer also must go through various procedures.