STOCK / SHARE
Shares are a form of security that represents an ownership interest in a joint stock company (JSC). The holder of shares is entitled to a share in the assets and profits of the corporation based on the number of shares he or she owns.
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Share price growth is reflected in an increase in the market value of the shares, which may be the result of an increase in the company's profits or positive future prospects.
Special dividends are issued on a one-off basis, for example, because of the sale of a company's assets or a significant gain on a particular transaction.
Regular dividends are portions of a company's earnings that are issued to shareholders with some regularity.
History of Stocks
The history of stocks dates back to the 17th century when the first shares were issued in the Netherlands. These first shares were used to finance merchant voyages and, subsequently, war campaigns. Gradually, stocks became a popular way of financing companies in Europe and North America.
In the 19th century, the importance of shares was further increased by the development of industry and increasing economic growth. It was also at this time that increasing numbers of shares began to be issued and the first stock exchanges were established where shares were traded.
In the 20th century, the importance of shares was further strengthened as they became an essential tool for investment and financial planning. Today, shares are traded on stock exchanges around the world and have become one of the main tools for portfolio diversification and income generation for investors.
1. Long-term value growth: stocks tend to grow in the long term, which can help investors build wealth.
2. Dividends: many stock companies pay regular dividends to their shareholders, allowing them to earn income from their investments.
3. Diversification: trading stocks allows investors to diversify their portfolio and increase its stability.
4. Ease of access: Today, it is possible to trade stocks online through various brokerage services, allowing investors easy access to the stock market.
1. Risk: Trading shares involves some financial risk as share prices can fluctuate.
2. Unpredictability: the stock market is unpredictable and can be affected by many factors such as economic events, political situations and others.
3. High volatility: Share prices can be very volatile, which can lead to large losses for investors if they are not prepared for short-term price fluctuations.
4. Information Demand: Trading stocks requires investors to have enough information and knowledge about the market to make good investment decisions.
A stock split is a process by which a company increases the number of its shares, thereby reducing the value of each individual share. The goal of a stock split is usually to improve the liquidity of the stock and increase its availability to smaller investors, as the price becomes more accessible to more investors after the stock has been reduced in value.
For example, in a 2-for-1 stock split, each shareholder receives two new shares for each original share, with the price of each new share being half the price of the original share.
Market capitalization is a shorthand term for the market value of a company, which is calculated as the number of shares of a company's stock outstanding multiplied by the current share price. It is an indicator that shows how much the market values a company and its potential.
Blue-chip stocks are shares of large, established, and financially stable companies that are considered reliable and long-term successful investments. These companies often have a high market value and are usually among the largest and most successful companies on the market.
IPO stands for Initial Public Offering and refers to the first public offering of a company's shares on a stock exchange. This allows a company to raise public capital and allows investors to invest in a company that is preparing for further growth and development.
P/E stands for the Price-to-Earnings ratio or the ratio of share price to earnings per share. This metric shows how much investors will pay for each dollar of a company's earnings and is often used to compare the value of different companies' stocks.