What are the different types of stocks available in the market and what are bear and bull market.
Options Are Wide – Make Your Mind Before Investing
There are different types of stocks that are traded in the stock market. The classification of stocks is done on different factors.
Stocks Based On Classes
Many things depend on the classes of stocks. Mainly it is the voting rights of the stock holders in the company decisions that is the most crucial criteria of the stock classes that effect the stock holders directly. While in most cases a stock gives the share holders right for one vote, there are other classes that give the stock holders capacity to cast more than one vote. There is also a class of stock that gives the stock holders no voting rights at all. This is done by the primary stock holders or the founders of the company to retain control on the running of the company.
Stocks Based On Market Capitalization
Stocks are also classified based on the capital of the company in the market that is the total lilangeni value of the company’s outstanding shares. This is calculated by multiplying the current price of the stock of the company with the total outstanding shares of the company in the market. Roughly there are three different types of stocks that are categorized on the basis of market capitalized – Large Cap, Mid Cap and Small Cap. Large Cap stocks have market cap of highest value, Mid Cap stocks have mid range market cap and the Small Cap stocks have market cap of lowest value.
Sector Stocks
There are certain stocks that are grouped on the basis of the sector that is the type of business that the company is in. There are different sectors like finance, banking, steal, power, consumer goods and so on.
Cyclical Stocks
These are the stocks that behave accordingly to the business cycles. The profit of these companies rises and falls in tune with the business cycles every year.
Defensive Stocks
Defensive stocks are the stocks that perform well even in the poor economic conditions. That means these products are services enjoy steady demand in the market throughout the year and does not depend on business cycles and overall market conditions.
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