Types of Stocks

Preferred or Common shares

In terms of its structure, shares can be classified as common shares or preferred shares.

Preferred shares are usally have prior claim to assets such as dividiends ahead of the common shares.In the event of business liquidation, preferred shareholders are entitled to claim the assets after creditors and debtholders, but before the common shareholders.

The disctinction between preferred and common shares is tabled below:

Preferred Shares
Common shares
claim on dividends or assets
higher
lower
voting rights
No
Yes
market liquidity
lower
higher
capital appreciation potential
lower
higher

 

Various classification of stocks:

The classification of stocks can be in a number of ways, depending on the circumstances it warrants. Group the stocks by the industries and sectors they are belong to is a most common way of stock classification. The hierarchy of the stock market can be illustrated as follows:

Stocks by Industries:

Stocks by sectors:

Stocks by capital assets:

Stocks by qualities:

 

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