What are Stocks and which of them are suitable for you?

Common shares, also known as common stock, represent units of ownership in a corporation. Holders of
common shares are equity owners of the company and are entitled to a portion of the company’s profits,
typically through dividends which are not guaranteed. They also have voting rights on corporate matters, such as electing the board of directors.
Common shareholders benefit from capital appreciation if the value of the company’s shares increases overtime. Conversely, they also bear the risk of capital loss if the company’s share price declines. In the event of a company liquidation, common shareholders have a residual claim on assets, meaning they are the last to be paid after creditors and preferred shareholders. This higher risk is balanced by the potential for higher returns through dividends and capital gains. Common shares are generally more liquid than other types of shares meaning they can be bought or sold more easily in the stock market.

Which of the stocks are suitable for any investor depends upon the type of stock whether it is growth or value stock and the risk profile of the investor. The risk profile of the investor depends upon the money available to the investor to invest and his/her aptitude, whether he/she is a risk taker or has risk aversion.