What is stock and Types of stock?

 What Is A Stock?

A stock is a piece of ownership in a company.

In the short-term, share price changes based on the fickle opinion of the masses.

In the long-term, a company’s true value is reflected in its share price.

More than just a slip of paper (or a computer record these days), a stock is a stake in a living, breathing business in which you share the rewards and the risks alike.

In the short term, a share price moves based on the opinion of the crowd: those people looking to buy or sell. When there are more people looking to buy, up the price goes. This is usually fickle, because the news of the day influences what the world thinks about certain stocks.

Over the long term, however, a company’s true value is reflected in its price, that’s why time – more than anything else – is the critical ingredient of successful investing.

As part-owner, you are entitled to a share of that company’s profits and assets. You also have a say in how that business is run. How much of those profits you have claim to and how much influence you have depends on the amount of stocks you own relative to the total number of shares issued.

Stocks are the backbone of a good investment portfolio and have proven to outperform every other form of investment in the long run.

Types of stock 

           1 Blue Chip Stock

           2 Penny Stock

           3 Value Stock

             4  Dividend Stock 

           5 Growth Stock

Blue chip stock

1.      He returned to his office after noticingthese high  trading price to write about "Blue chip Stock" He related all the highPriced stocks with the blue chip which are of the highest value in the game of poker 
2.     Originally ,this connotation was only related to high priced stocks but then later as time passed by this term was broadly defined as high quality stocks  

Penny stocks 

         

1. Penny stock accossible at low price  have a low market capitalization       ,and are loved by aggressive investors for the belief that these stocks can provide huge return in a short period of time here are the top fundamentally strong Penny stocks     

Value Stock 

       The price to earnings to growth ratio or PEG for short ,is an indicator  used fundamentally analysis in order to value a stock 

           

       Value stock selection check list 

   

                    P/E Ratio < 20

                    P/B Ratio < 2

                    Price/FCF < 20

                    PEG Ratio < 2

        

                    ROIC > 10%

                    Gross Margin > 50%

     " Don't just buy stocks , buy great business . I don't have a stocks portfolio , I have a portfolio of great business .

Dividend stock 📈 

                  

1. Powerful returns on compound interest
2. Ability to reduce inflation risk
3. Safety when the stock market crashes
4. An income stream and financial freedom

Pick Good Dividend Stock

1. Is the payment ratio less than 60%
2. Is the dividend increasing every year
3. Is the company consistently profitable
4. Is the company's  industry in good health
5. Is the debt -to- equity ratio less than 1.50

Growth stock 📈

 

1. Market capital of more than 20k crores
2. Last 5year sales growth
3. Last 5year profit gr6
4. Dividend payout of less than 20% of total profits