Types of Stocks and Shares in a Company

A graduate of the University of Michigan, Janek Pawlik holds a master of business administration. Janek Pawlik also has a BS in industrial engineering and served in the past as an operations manager with Siebel Systems, Inc. He also is interested in investing in stocks.

Investing in stocks requires extensive knowledge of how stocks work and what drives the change of market values or trends. Although investing in stocks can be risky, stocks can be an efficient way to build net worth. Stocks can also enable people to get capital appreciation and increase the market price of their investment. Stocks or shares are ownership equities in a particular firm from which people can earn money in the form of dividends, depending on the success of the firm and its revenues. Through stocks, investors can receive a passive income from the profits that the company makes.

Depending on how many stocks or shares an investor has in the company, the investor can even get voting rights and be a part of the company’s board. There are two basic types of stocks, common and preferred. Common stocks come with voting rights and give the shareholder a say in the internal meetings of the company, while preferred stocks can enable an investor to receive dividends or assets if the company liquidates.