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Introduction to Stocks by Xdirect Forex





Introduction to Stocks by
Article Posted: 05/04/2016
Article Views: 2478
Articles Written: 2
Word Count: 391
Article Votes: 1
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Introduction to Stocks


 
Investment,Ezine Publishing,Finance & Investment
Who wouldn't be keen to become a successful business proprietor without ever having to turn up at workplace? Just imagine if you could take it easy, watch your company flourish, and collect the profits as the money flows in! To many of us this situation might sound like a fanciful dream, but it's actually closer to reality. As you probably know what it is, then yes we're talking about dealing in stocks. This tremendous type of financial instrument is, undoubtedly, one of the finest tools ever discovered for generating wealth. Stocks are a major part of nearly all investment portfolios. When you begin on your pathway to financial freedom, you ought to have an in-depth understanding of stocks and how they trade on the stock market. Over the years, the average person's curiosity in the stock market has grown expeditiously. What was once a toy of the well-off has now turned into the medium of choice for growing riches. In spite of their popularity, however, majority of the people don't completely understand stocks. Stocks have the ability to create huge amounts of wealth, but good things don’t come in hand without risks. The only solution to this is proper learning about stocks. The key to prosper yourself in the stock market is to understand where you are investing your money. Investing in a company's stock indirectly means that you are one of the owners (shareholders) of a company and, by itself you have a claim (very little) to everything the company owns. Hence being an owner, you are entitled to your share of the company's profits in addition to any voting rights connected to the stock. Do you know why does a company issue its stocks and share the profits with thousands of people when the founders can keep profits to themselves? This is because, that sometimes every company needs to raise money for which either the companies can borrow it from banks or arrange it by selling division of the company, which is known as issuing stock (equity financing). Issuing stock is beneficial for the company since the company is not entitled to pay back the money or pay interest along the way. All that the shareholders get by investing their money is the optimism that the shares will soon be worth more than what they paid for them.


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