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Wednesday, April 8, 2009

Basics of Stocks 1: Stocks

By Mara Hernandez-Capili

We can see that there is a lot of information related to the world of stock trading. The subject has grown dramatically over the years as more and more people learn to participate in its field. The idea of investing with stocks is no longer limited to business owners or highly intellectual financial people since there are also entrepreneurs, employees and independent professionals who engage in stock investing.

There are different kinds and forms of investing in stocks. There are stocks exclusively available for sophisticated investors only since it is illegal and unlawful to be offered to other people. There are also stocks that are freely offered to anyone (which is the one I will discuss to you) who are willing to be a part-owner of a certain company. Let me discuss to you now the basics of stocks.

To understand the matter of stock trading or stock ownership better, let me introduce to you the definition of stocks. Stocks are shares or piece of ownership from a company. When you buy stocks from the company you are considered as its part-owner. Your capital will enjoy percentage increase when the company reaches higher profits. However, there is also a risk present in acquiring stocks. You are not really guaranteed with increases since the company may also experience losses.

There are perks involved when you invest your money through stocks and among these is that you get to experience company privileges such as voting rights. The higher your investment, the higher the returns or percentage you will gain. You will also experience your money working for you and not the other way around since you will earn without you doing anything.

Investing in stocks is challenging, easy and fun. You just have to have the capital to start with. If youre the kind of person who detests risks, then it is advisable for you to start with a lower stock where you are most comfortable with. - 23217

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