Various Classes of Stock Investments
Shares in a company are generally called stock investments. There are various classes of stocks in the share markets. These shares are contained within two issues,common stock and preferred stock. Shares, that are issued for common stock, make benefit for individual investor. In preferred stock issue, institutional investors are required to purchase shares. The type of stock which is held by the stock holder is the determinant of the value of stock, and the buying and selling price of the stock is affected by it. However, there are different types of stock investments available in the share market those are included or belonged to the above stock issues.
Income stocks: stocks of increased dividends
As a higher dividend payout is offered by the income stocks, they are more attractive. An income stock can be termed as an equity security which has dividends that gradually increase and give a high yield, and in this way it ensure a regular payment to the stockholder. The investors who look for a high profit with relatively risk-free stock investing generally seek this kind of stock investment. The major parts of income stocks are much less volatile than stock market in general, for which, a higher yield than the average stock market of dividends are acquired. A ongoing stream of revenue is offered by them and this way the revenue allows the companies to provide the investors with a high income payout level. In most industries, this class of stock investment system is found but its most common place is financial institutions, natural resources, energy, investment trusts for real estate or equality companies.
Glamor stocks: increased value of growth stocks
Shares held by the stockholder in a company which have earnings that are expected to gain value through a time period and has the possibility to yield a high return which is excessive than the relative market rate are called growth stocks of glamor stocks. As the stock price increases as a result of gradually growing business, growth stock investors benefit from the gains. This type of growth is supposed to increase the value of growth stock and the profits that are gained are generally invested again in the same company. As a result of reinvesting tendency of the company, a dividend is not paid to the stockholder in cases of this type of stock. In the year 2010, technology companies are the ones that account for the major part of issuers of growth stock. In some general cases, the value of growth stock can be overestimated, so it is an important step for the prospective investors of growth stock to make a research on the value and find out the actual value of that stock before investing it. Companies that deal with growth stock contain different industries and sectors. Some examples of growth stock companies are given here: Aeropostale, Panera Bread, Knight Transportation and Navigant Consulting.
Secured Stocks: Blue chip stocks
Stocks, sold by companies, are known as blue chip stocks. This is another type of stock investment that ensures secure, impressive as well as steady income with a least level of charges. Blue chip stocks are generally issued by well-established companies. Investors seek this type of stock, because it provides constant pathway record of everyday payment of a person. Investors seeking for safe, secure as well as reliable stocks are prominently interested to invest in blue chip stocks. In addition, blue chip stocks are one of the most valuable stocks in the share markets. Various companies, such as Coca-Cola, Walmart as well as Gillette offer such kind of investment to investors.
Other Type of Stocks
Investors can seek for low-priced type of stock investment which is known as penny stocks. In penny stocks, the price of each share will be as high as five USD. Major stock exchanges markets do not trade this type of stocks usually. Although low price stocks are most attractive, but there are some risks into penny stock investments. So, new investors should be careful when buying penny stocks. On the other hand, some employees get an investment opportunity account from their company where they work. This is actually known as employee stock purchase plan (ESPP). In this system, employees can buy only their company’s stocks with some discounts. There is an individual retirement account, known as IRA, perhaps the next investment account that a person opens. In IRA investment, the investors can get the ability to select the stocks according to their wish. In mutual fund investment, almost all the investors need to become introduced with the stock market. In stock markets investors find different categories of mutual funds as like as balanced funds, Equity funds as well as debt funds. These kinds of funds are involved in investing shares of government papers, corporations or Treasury bills.
