Types of Stocks Investing

Stock is the actual shares in which ownership of a company is vested. In common American English, the stocks are collectively referred to as “stock”. A single share of this stock represents a fractional ownership in proportion to its total number of outstanding shares. Stocks represent the financial assets of a company and their value are determined by their market price, company profile, and industry analysis. There are different kinds of stocks: common stocks, preferred stocks, short-term stocks, long-term stocks, and treasury stocks.


Stocks are listed and traded publicly on exchange markets. Over-the-counter trading in stocks was introduced in 1997. The New York Stock Exchange and the NASDQ are two such exchanges. In NASDAQ, the most active stocks are listed on its Pink Sheets and in the Over the Counter Bulletin Board (OTCBB).

Individual stocks can be traded separately or invested in mutual funds. A mutual fund is a group of stocks or bonds that are managed by an investment manager. Funds are usually committed to specific investments, including alternative investments, real estate, stocks and bonds, gold, and cash deposits. Funds vary in the amount of money they invest; some are even restricted to particular sectors.

Certain types of investments, such as the growth stock mutual funds, invest in stocks of companies that have been expanding their business in recent years. These types of funds have a tendency to focus on companies that show promise in the growth industries. This sector may also include emerging technologies or companies involved in mergers and acquisitions. There are advantages and disadvantages in both types of investing.

Investments in the growth stock mutual fund are more stable than investing in single stocks because the manager of the fund is typically an experienced investor with a good track record. This type of fund generally seeks stocks of companies that show growth potential. A disadvantage is that the fund will usually not be able to purchase all the stocks of companies valued at the top price. Additionally, the fund will not be able to choose all the stocks of publicly traded corporations. Some funds will only invest in these companies, regardless of their value.

As noted, there are two primary types of stocks: common stocks and preferred stocks. Common stocks are those that are owned by the general public and include stocks issued by businesses large and small. Preferred stocks are those that are issued by publicly traded corporations; however, they are not publicly traded. They are typically preferred stocks listed on stock exchanges.