Stocks represent the original capital that is paid or invested in a business by its founders or promoters. Stocks serves as a security to the creditors of a business, stocks are known to be different from the assets or properties of a business that can fluctuate either in value or in quantity.
Stocks are mainly divided in to numerous numbers of shares of certain values and the amount as well as the number of shares must be stated at the time of the formation of a company. A single share is worth of certain value, which is referred as par value or nominal value. A document is issued that states the ownership of the shares and it is generally referred as stock certificate.
It is a legal document that contains information such as the value of shares that is owned by an individual. Stocks fund are referred to the money that is to be invested at the time of purchase of stocks or shares. There are two types of stocks, namely common stock and preferred stock. It is up to the choice of the people on which stock they would prefer to invest their money.
Common stocks holders have the right to vote that can be exercised in corporate decisions, whereas preferred stock holders doesn’t have the right to vote. Convertible preferred stocks referred to that preferred stock that can be converted into shares or common stock. The option is given to the stock holder for the conversion of stock.
Investment in stock is very tricky and one needs to be very cautious before making any move. It is better to consult with a stock or consultant before making any investment in stocks fund.