| For beginners, one of the most difficult aspects of | | | | gauge your own risk level. These are usually |
| understanding stock investments deals with the | | | | brand new companies or unknown companies. |
| various types of stock. There are several | | | | This category would include all those |
| different types of stock to choose from.Income | | | | dot-coms.Preferred stock happens when a |
| stocks are issued by companies that are stable. | | | | company issues different classes of stock. The |
| The company will not usually reinvest a large | | | | company could have a common stock and then |
| amount of their profits back into the company | | | | have a preferred stock. The preferred stock has |
| each year. The profits are instead distributed to | | | | a higher claim to company earnings, such as |
| the shareholders in the form of a dividend. If you | | | | dividend payments. The amount of the dividend |
| want dividend income and capital appreciation, you | | | | payment is fixed, unlike the common stock, and |
| should look towards income stocks. But | | | | will be paid before common stocks are. If you |
| remember that dividends will be taxed. Plus, the | | | | own a preferred stock in a company that isn't |
| dividend could go higher or lower each | | | | doing well, you will still get your fixed payment. |
| year.Growth stocks are issued by companies that | | | | You will also share in the assets in the case of a |
| are looking to grow and expand. There is usually | | | | bankruptcy before those holding common stock |
| no, or very little, dividend income from growth | | | | will.These are the most commonly thrown around |
| stock. Many of the companies are just starting | | | | stock types. You have probably heard of them |
| out in the business world and are actively | | | | around the water cooler at work or on the news. |
| reinvesting their earnings into their companies. | | | | There are several other types of stocks that are |
| Most advisors consider growth stocks a good | | | | also available, including convertible preferred |
| choice for those looking to make a nice return | | | | stocks and blue-chip stocks. It is essential that |
| over a long period fo time. Annual returns usually | | | | you understand the different types of stocks |
| run around 11% over ten years. The idea is that | | | | when looking to invest. They all have different |
| growth stocks will grow given time.A value stock | | | | benefits and drawbacks. What type of stock you |
| is a stock that has gone down in price. It is usually | | | | invest in depends on what you want to see from |
| considered to be a good buy. Value stocks are | | | | your investment. Are you looking for a quick way |
| based more on the company's assets than the | | | | to make a lot of money? Or are you wanting to |
| earning potential. The growth of the company isn't | | | | invest money and simply let it grow over time? |
| the issue at hand with a value stock. Investors | | | | Ask yourself these questions when looking at |
| buy value stocks for shares of a solid company | | | | what type of stock works for your financial |
| at a good price and that in time the price will | | | | goals.Martin Lukac represents an Internet |
| reflect the stability of the company. Then the | | | | consumer banking marketplace. is a destination |
| price of the stock will go up.Speculative stocks | | | | site of personal finance, investing, taxes and |
| are like the new stocks on the block. They are | | | | mortgage rates. provides mortgage guides and |
| the riskiest stock available. You can either make a | | | | financial rates and information. |
| lot of money or lose it all quite easily. You have to | | | | |