The news of stock market not doing well was common and frequent during the economic downturn last year. Perhaps many of you might have also decided not to invest in them. This must be more common with people who have not been regular in share markets and have been almost an outsider to it. But before you decide that you never want to invest in them, you must first learn about the basics of share trading. Here are some highlights of the a href="http://www.learnshares.com.au" share market /a : Stocks If you have never invested before, the question of what a stock is must be lurking in your mind. In the simplest words, it is the partial ownership in an organization. If you buy shares of a particular company then you are entitled to a particular portion of the company’s profits. These are paid in the form of dividends at different times. Types of Stocks There are basically two types of stocks. These are common and preferred. Common represents the majority of the stocks. It refers to ownership of a part of the company and also claim on a part of profit of the company that may be paid in the form of dividends. This amount however fluctuates and there is no guarantee of a fixed payment. They also include voting rights. However, in the long run, it may involve a lot of risk but they are the most paying assets. Preferred Stock also means an ownership in the company but it does not include any voting rights. However, the dividend is usually fixed in this type of stock ownership. Purchasing the Stock After you have made up your mind about buying shares you will have to decide how you will buy the shares. It can be done in two ways. The first is through full service broker. These brokers will offer advice on financial planning and how you can select the stocks in which you want to invest in. But this is one of the expensive ways of buying shares. But in case you do not have much time for understanding the nuances of share trading then this is the best option for you. The other way is through discount brokers. These brokers are different from the service brokers. These brokers work with investors who do their research on the stocks themselves. Stock Trading These stocks are traded on the exchanges. This is the place where buyers as well as sellers meet and then decide upon a price. There are physical locations and over the counter exchanges also. The over the counter ones are carried out virtually through an electronic medium. So, trade in shares but only when you have full knowledge about them.
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