What is a share?

What is a share?

share (or stock) is a security that gives the buyer part of the ownership of the issuing company.

Moreover, a the owner of a share can also have the right to claim a part of the earning gained by the enterprise, which might be distributed among shareholders as dividends.

There are two types of shares: common and preferred.

The first ones usually allow the owner to vote at the shareholders’ meetings and to receive dividends, while the second ones generally do not give voting rights, but grant the owner a higher claim on assets and earning than the common shares (this turns particularly useful in case of bankruptcy or liquidation of the firm).

Historically speaking, shares have outperformed every other type of investment other the long-run.

Sources:

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