Stocks Flashcards
What is a stock ?
pieces of publicly traded company . anyone can become an owner - Shareholder .
What is a shareholder ?
a partial owner of the company . more shares means more influence with in the company .
What are shareholder rights ?
- Voting power on major issues .
- Ownership in a portion of the company .
- The right to transfer ownership .
- An entitement of dividends .
- Opportunity to inspect company books and records .
- The right to sue for wrongful acts .
How do you make money with stocks ?
Through capital gains and dividends .
What is capital gain ?
The diffrence between buying price and selling price . only if its a positive .
What is dividend ?
An amount of company profits that the company pays to people who own stock in the company .
Who decides about dividends ?
Decided by the board of directors .
When the board will use dividends ?
Board of directors will always use dividends in times of profit in order to attract and keep in investors .
What is market capitalization ?
The company’s total value . You calculate the company’s value by : Company’s share number X share price .
What are sectors and industries ?
Catagories in which companies are placed in realtion to what they do . Sectors represents large part of the economy like transportation or industy and manufacturing . Industries are part of a sector for example banks are industry within the financial sector .
They all move together in terms of stock price .
How to maintain a healthy protflio ?
By owning stocks in diffrent sectors and industries , so a stock of one industry were to fall youll have the protection of the other stocks from diffrent industries and sectors .
What is secular stocks ?
Stocks in sector that people need , services people will always use even in week economy like healthcare or consumer staples .
What is Cyclicals stocks ?
Stocks in sectors that require strong economy like travel or luxury goods , during times of economic hardship they tend to have decreased profits as people try to cut down expenses .
What is common stock ?
Gives the shareholder the right to vote corporate policy and electing the board of directors . payed usually by capital gain .considered more riskier but outperform bonds and preferred shares in the long run .
What is preferred stock ?
Usually have fixed dividend payments ,
