Difference Between Shares and Stocks
Shares are the most popular way which is used by the companies to raise public money for their business. A company may issue bonds, take loans from banks and other institutions or issue shares to raise money. The rate at which the share is issued in the market is called face value of the share. People invest in many companies and may by shares of different companies. This collection of shares is known as his stock.
Some of the features of shares are:
- Share is a unit of share in the company and there is fixed and equal price of all the units issued in the market.
- People who hold the shares are known as shareholders.
- Shares in each country are different from other countries.
- The shares can be sold as and when desired by the shareholder but they are sold at a price of the share in the share market.
- Share holders get dividend on the shares every year. This amount is fixed by the board of the company
- Investments in shares is risky and you can earn lot of money from the shares have good price or you may lose money as well.
- Share holders can vote in the annual meetings of the company.
The portfolio of a person holding stocks of different companies or all the share of a same company is known as stock. Stock of a company is the total number of shares held by a person. Stocks can be preferred stocks or common stocks. A common stock holder gets s voting rights while preferred stock holder does not although preferred stock holders are paid dividends prior to the common stock holders. It is always advised to take expert advice before buying the stock of a company as it is always risky.
Stocks and shares can be traded through stock exchange. The price of these shares and stocks are fixed by the local government bodies, banks and the directors of the company. Shares are individual units while these individual units are collectively known as stocks. The numbers of shares tell you about the number of nits that you hold while stock tells you about the total amount of money invested.
It is advised that a person should buy stocks in different company rather than investing in just one company to avoid bigger risks.