English Stocks and Investment: What You Need to Know

Two Clearly Different Types of Stocks

Investors new to the industry often confuse “Stock” with “Share,” wondering if they are the same term. In reality, Shares and Stock do not mean exactly the same thing.

Stock is a broader general term used to describe ownership shares in one or more companies. Share has a more specific meaning, referring to an ownership unit in a single company or investment fund. It can include common stocks but may also refer to other types of investments such as ETFs or mutual funds. Overall, both Stock and Share represent investors’ rights to ownership.

Why Do Companies Issue Shares?

When a company issues shares to investors, the company receives funds for various purposes such as:

• Debt repayment from previous operations
• Launching new products or services
• Expanding into new markets or branches
• Developing infrastructure or creating additional facilities

When a company sells shares, investors become shareholders and gain rights according to the type of shares they hold.

Reasons Investors Want to Buy Shares

Investors do not buy shares solely expecting prices to rise. Investing in shares in English and other currencies has several motivations:

• Appreciation of investment value: occurs when share prices increase, allowing shareholders to sell for profit
• Receiving dividends: companies regularly share profits with shareholders, which is more stable than speculative trading
• Voting rights: some common shareholders have the right to influence major company decisions

Two Types of Shares You Should Know

Shares are generally divided into two main types, which differ in rights and returns:

###Common Stock(

Common stock represents ownership in the company and grants voting rights to shareholders. They can participate in decision-making processes. They may also receive dividends, but the amount can vary depending on the company’s performance.

)Preferred Stock###

Preferred stock grants more rights and priority over common stock regarding dividends and asset distribution in the event of liquidation. Preferred shareholders often receive fixed dividends, providing more stability, but usually do not have voting rights.

Classification of Shares Based on Growth Characteristics

Besides the type classification, shares are also categorized based on growth potential:

Growth Stock (Growth Stock): Shares of companies expected to grow at a rate higher than the market average. Investors buy because they anticipate the company will gain more market share and improve competitiveness in the coming years. These are often companies in the early stages of their life cycle.

Value Stock (Value Stock): Issued by fully grown and stable companies with consistent profitability, undervalued prices, high safety, and continuous dividends. These stocks tend to be less volatile than growth stocks and attract investors seeking stable income rather than high profits.