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Publicly Traded Stock

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Publicly traded or listed stock is a security that can be bought and sold freely in the stock market. They are issued in the primary market and then traded in the secondary market.

Companies put shares into circulation with the objective of raising funds from the public. Thus, when the investor obtains one of these securities, he is acquiring a small stake in the company.

The owner of the action also has the right to receive dividends and vote at the general meeting of partners. You could even enjoy preference to buy new company titles in case the capital is increased.

Characteristics of the publicly traded stock

The main characteristics of the shares listed on the stock exchange are:

- Liquidity: They can be traded easily. In this way, the owner can get rid of her (s) almost immediately if she considers, for example, that the firm in question has made a bad business decision.
- Risk: Uncertainty is an intrinsic feature of the publicly traded stock. This, given that the investor doesn't know precisely the return or dividend he will receive. At this point, it should be noted that the main risk to which an action is exposed is to lower its price. This can happen for many variables, internal or external to the company.
- Market price: The price of a share depends on the market value of the company. That is, it's calculated objectively.

Types of publicly traded shares

There are several types of shares listed on the stock exchange, depending on your level of risk:

- Defensive: They are titles whose quotation doesn't vary much over time. This, because the company's revenues are relatively stable.
- High growth: These are actions with upward expectations in the medium and long term. These are high-risk businesses such as those related to technology.
- Blue Chips: These are titles of solid companies that have a good position in their sector and that have the highest liquidity in the stock market.
- High speculation: They are small companies with low market capitalization. They have as a common denominator high speculation and media advertising. Therefore, it's dangerous to invest in them, specially for small investors.

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