8 Types of Stocks You Must Know For Beginners

Shares are certificates of ownership of a company. When you own shares of a company, you can benefit from being a part owner of the company. Shares can be invested in the stock market.

Stock investment is the activity of buying and selling shares to gain profit. Shares will be bought when the price is cheap and stable and then sold when the price is high and promising.

That way, the difference from the transaction will be an advantage for investors. Investing in stocks is actually difficult, because there are a number of things that you must understand, such as the types of stocks. The types of stocks are actually quite a lot, but the types below should at least be known by beginners. Here's an explanation.

1# Common Stock

This type of stock is the most traded stock in the financial market. It is also known as common stock and apart from the profits from buying and selling shares, you can also benefit from dividends. Dividends are the distribution of profits or profits that the company gets for its shareholders.

2# Preferred Stock

Also known as preferred stock. This type of share provides several privileges to the holder. This stock has characteristics similar to bonds because investors can get returns from depositing capital so that this type of stock can be said to be a combination of stocks and bonds.

3# Shares on behalf of

Bearer stock or shares on behalf of is a type of shares that are not on behalf of. Therefore, the transaction process or transfer is fairly easy.

4# Blue Chips

It has a large capital of up to Rp. 10 trillion with stable dividends because issuers are diligent in distributing dividends to shareholders. LQ45 is a designation for the list of shares that fall into the Blue Chip category on the Indonesia Stock Exchange.

5# Income Stocks

This stock appears when the issuer who issues the shares gets the highest profit or profit from what they have ever achieved. Then with these extra profits, dividends are distributed to the shareholders.

6# Growth Stocks

Shares are usually issued by large companies. These stocks have high profit margins from sector-leading issuers.

7# Lesser-Known Stock

The opposite of growth stocks because they are less popular but have their own advantages, namely the dominant company has good performance.

8# Speculative Stocks

Stocks that are quite promising in the long term because they have the potential to benefit in the future. This type of stock is suitable for investors with a high risk profile because the earnings are unstable but easy to find in the capital market.