Stocks Essay

283 words - 2 pages

Advantages and Disadvantages of Preferred Stock

Preferred stock offers several advantages and disadvantages when compare to common stock. It gains its name for the fact that it takes priority over common stock dividends are to be paid. In other words, preferred shareholders will also take precedence over common shareholders in the event a company is liquidated, however, they will not take precedence over creditors. From ...view middle of the document...

In addition, the interest yield of preferred stocks is known for being less volatile than bonds. An important drawback of most preferred stocks is that they do not provide voting rights for the shareholder.
In many ways, a preferred security works like a hybrid of a stock and bond. The face value of the asset is not going to fluctuate very much, thus leaving out the possibility for a windfall profit. In exchange, the holder of a preferred security will enjoy a steady stream of guaranteed dividend payments. It also provides the peace of mind knowing that your claims to assets will have priority if the company ever goes bankrupt.
As an investment, I would choose common stock. Although the risk can be higher, there is a greater potential to experience a very large profit. If I was a significant shareholder in a company, I would choose common stock because it provides voting rights that can be used to vote on corporate affairs. This provides the shareholder with the ability to have influence over corporate affairs. Ideally, a diversified portfolio will contain a variety of common and preferred stocks spread out the risks and rewards evenly.

Other Papers Like Stocks

Investing Stocks and Bonds Essay

1427 words - 6 pages Investing in Stocks and Bonds Stocks and Bonds are different in many ways. A stock is a portion or share of the ownership of a corporation. A share will give the owner of the stock the company’s profits or loses over time. The good thing about stocks is they can be sold at almost any time as long as there is someone willing to buy. A bond, on the other hand, is a fixed interest financial asset issued by governments, companies, banks, and

Trading Negative Beta Stocks Essay

879 words - 4 pages If the stock market rises instead of fall as David expected, the price of stock market index future contract will decrease and the price of the stocks goes up. In general, the systematic risk of the portfolio that cannot be reduced by diversification has been hedged. A hedge is an investment position intended to offset potential losses/gains that may be incurred by a companion investment. In simple language, a hedge is used to reduce any

The Case For And Against Buffer Stocks

825 words - 4 pages possible whereas producers want a high price. This requires a value judgment to be made which cannot be agreed on by everyone. This could be seen as undesirable for producers as the price to A buffer stock system involves the government or local authorities buying these storage stocks and selling them back to the famer. Price stability is indicated by low inflation whereby the value of money is also stable. A buffer stock is an attempt at

Report About Constructing Portfolio of Stocks

3438 words - 14 pages | | Summit Power | Pharmaceutical & Chemical | Square Pharma | Cement | Heidelberg Cement | Reason for selection: Islami Bank Bangladesh Ltd-It is one of the most safe and fundamentals and liquid stock in our bourses. Though most of the Bank stocks generated negative return in the last few years due plunging share market, Islami Bank generated a positive return (1.46%) with around 11.71% risk. Islami Bank is one of blue chip stock in our

Stocks Java

718 words - 3 pages Lab 4-1 Create a Java Program to Stock Class package myjavaproject2; public class Lab4_1 { public static void main(String[] args) { // TODO Auto-generated method stub Stock stock = new Stock("ESI", "ITT Technical Institute Inc."); stock.setPreviousClosingPrice(60.0); // Set current price stock.setCurrentPrice(65.0); // Display stock info System.out.println("Symbol: " + stock.getSymbol

How Musicians Increasingly Rely on Stocks and Bonds

720 words - 3 pages How Musicians Increasingly Rely on Stocks and Bonds The value of a cello or violin can go up or down just like the value of shares in a company. A depends on how the instrument is cared for. If is it mistreated, the value will go down. In addition, if it is treated correctly and cared for the value can go up. Another thing that affects the value of these instruments is the type of wood they are made out of. In order for a cello or violin

Stocks and Bonds

1020 words - 5 pages Chapter 16: Extending the Analysis of Aggregate Supply From Short Run to Long Run * Short-run: a period in which nominal wages (and other input prices) do not respond to price level changes. * Workers may not be fully aware of the change in their real wages due to inflation (or deflation) and thus have not adjusted their labor supply decisions and wage demands accordingly. * Employees hired under fixed wage contracts

Bonds and Stocks

1891 words - 8 pages The film opens with the girl, Natalie (Morgan Griffin), driving through the cliff of San Fernando Valley, 16 miles (25.75 kms) north of Los Angeles, when suddenly the rock slides onto the car, causing it to fall then hang into the edge of cliff. Moments later, Los Angeles Fire Department helicopter-pilot Chief Raymond "Ray" Gaines (Dwayne Johnson) and his other colleagues comes to rescue the girl trapped in the car. Ray safely rescues the girl

Finding Your 401k Beta

650 words - 3 pages Project 4: Finding Your 401(k) Beta The following report will evaluate and compare the systematic risk of the stocks within a 401(k) investment portfolio. The time period for which the stocks in this investment portfolio have been analyzed is January 1, 2004 through December 31, 2014. Each stock has had a beta test and corresponding regression analysis performed. A portfolio-wide beta test has also been completed to make further detailed

Primary And Secondary Markets

287 words - 2 pages In the financial markets, there are Primary Markets and Secondary Markets. Explain and elaborate on the both markets. What are some differences to an Investor? Which market would an investor want to trade in if they knew there would be a large demand in a market on a later date? There are two types of financial markets available they are Primary Markets and Secondary Markets. A Primary Market is when the company issues stocks available for


667 words - 3 pages If I had to invest $10,000 in stocks, I would not put all my money into one stock. As they say, you should not put all your eggs in one basket. Also, it is important to note that various stocks have different correlations with the market. That is to say, some stocks have a positive beta coefficient, which means that the stock value increases and decreases as the market goes up and down respectively. Other stocks have a negative beta coefficient

Related Essays

Stocks Essay

266 words - 2 pages Stocks Stocks October 10, 2015 XACC/291 Stocks Many people wonder why preferred stock is referred to as preferred and what makes it more attractive to investors. Preferred stock shares are "preferred" because they have the preference over the common shares to receive dividends and company assets if the business is liquidated. If a company does not have enough cash to pay dividends to both the preferred shares and the common

Stocks Trading Essay

2861 words - 12 pages TRADING STOCKS Stock trading has become one of the most popular and efficient ways to make money since it is easy to access and it could bring a lot of money back to investors. With some extra money, anyone can purchase stocks from a company or corporation and make profit. A stock is basically a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings. There are two

Stocks Basics Essay

5095 words - 21 pages Introduction Wouldn't you love to be a business owner without ever having to show up at work? Imagine if you could sit back, watch your company grow, and collect the dividend checks as the money rolls in! This situation might sound like a pipe dream, but it's closer to reality than you might think.  As you've probably guessed, we're talking about owning stocks. This fabulous category of financial instruments is, without a doubt, one of the

Value And Growth Stocks Essay

994 words - 4 pages decisions on other companies by purchasing those company’s stocks. There are two options of stock available in the stock market which is Value and Growth stock. Value stocks are usually low price to earnings ratio and low price to book ratio. Sometimes a company may have weak temporary earnings and had fallen on bad times. Sometimes poor quarterly earnings depress the company’s stock price temporarily and create a long-term stock buying option