The biggest benefit of investing in the financial market is having more free time to devote to family, friends, health care or other personal projects. This is possible because over the years, stocks begin to provide a financial return without the investor having to make much effort. However, you will need to invest time studying, and applying important concepts such as the ones you will learn in this article. In addition, it is always recommended to have the support of professionals specialized in the subject. Invest with Astha trade under expert’s guidance, and explore the world of possibilities.
Let’s move a little further on understanding the concept of actions. In addition to knowing them since their inception, and understanding their forms of trading on the stock exchange, you also need to distinguish the types that exist in the financial market.
Common Shares (ON)
Common shares are securities that guarantee the holder the right to vote in decisions made by the company’s management. That is, you can also participate in its deliberations. However, a small investor may have little expressiveness in his vote. People with a large number of shares earn more equity in the company. Therefore, the acquisition of these assets may not be very advantageous. Although, it seems an interesting position, the holder of common shares (ON) is not the first to receive dividends from the company and, in some cases, their earnings may be lower than those of holders of preferred shares. But that is a subject for our next topic.
Preferred Shares (PN)
Preferred Shares, as their name implies, have preference in the distribution of dividends by the Company. But, do not give voting rights to their holders. In addition, they usually have a higher liquidity than the previous modality, because they are more traded on the stock exchange.
Preferred shares may still be divided into classes that are generally differentiated by the letters A, B or C. Each has its own rights and restrictions, particularly as regards the receipt of dividends. There is still another subdivision of preferred shares. Basically, they are considered a compound asset, allowing the investor to trade different types of shares in the same set, using the same code. A UNIT may consist of one preferred share and one common share of the same company.
Financial independence is another benefit that arises over time from the moment you decide to invest in stocks. We know that the stock market is very profitable, and can provide recurring earnings for those who invest with some people even living off their income. In this context, actions emerge as one of the modalities that have the highest profit potential. Thus, financial independence can be achieved more quickly and effectively for those who decide to venture into this market, provided they have the right tools, knowledge and appropriate technical support. To understand stock market, you must understand the terms.