All About Stock Parker CO

Buying and selling shares of stock is at the root of American capitalism, the mechanism by which great companies have been built ever since the New York Stock Exchange was created way back in 1789. But what's truly great about the American stock market is that anyone, not just the rich and privileged, can participate.

Let's start at the beginning. A stock isn't some abstract concept. A stock represents a single share of ownership in a company. When you own a stock, you're actually a part owner of a corporation, with all the rights and responsibilities that come along with that. As a shareholder, you have a say in how the company operates - though if the company has issued millions or even billions of shares, your 10 or 100 shares might not make you the most influential shareholder!

Companies issue stock in the first place so that they can raise capital to run their business. A corporation sells off shares to outside investors in organized fashion in a public offering; the first of which is its initial public offering (or IPO).

The company can issue common stock or preferred stock.

• Common stock represents a simple share of ownership; if the company were to go bankrupt, it would have no financial liability to common shareholders, so those shares would likely become worthless.
• Preferred shares, on the other hand, get some special perks, which might include higher dividends or a larger vote in running the company. Preferred shares aren't as common as common stock, so you might never own preferred stock in your portfolio.
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