What are stocks?
Stocks are trading in the stock market. Historically, stocks tend to rise in value over time. It also has the opportunity to achieve better performance than other types of investment in the long term. However, equities are subject to higher price volatility than other financial instruments. The stock market is one of two imams or speculators. It is the investor who buys the company’s shares after reviewing the performance of the company, the knowledge of its services and the strength of its products, and is aware of its quarterly financial statements (quarterly, semi-annual) and financial statements at the end of the financial year. A comparison between the performance of the company at different annual intervals or between the performance of the company and its competitor. This method is called Fundamental Analysis. Those who follow this method are those who want to make profits from the expected rise in the stock within several months or years or until he earns profits from the company in exchange for his share of the company. The stock acquisition strategy in this way is called buy and hold, ie, owning a share and staying in the investment portfolio for a period. The second class of traders is the speculator, who analyzes the stock using the stock performance chart. The speculator does not pay attention to the company’s products or services or to the financial statements. All he cares about is the arrow movement that is illustrated by the graph. This type of analysis is called Technical Analysis. Speculators are divided into sections such as Swing Trader and Day Trader.
The difference between stocks and bonds
There is a difference between commercial shares and bonds, as shares are considered shares in the company’s issued share capital whereas bonds are considered a debt on the company in favor of the bond holder. On the other hand, the bond guarantees the holder annual interest, and therefore riskless, either the shares are not guarantor of the holder receive a share of the profits of the company as mentioned earlier. Comparison between stocks and bonds: The difference between the bond and the stock:
The difference between the bond and the stock:
Arrow: An instrument representing a share in the share capital of a joint stock company. It can be said that equities: instruments of equal value, indivisible and tradable by trade, represent the equity of companies that have contributed to their capital. A bond is a negotiable financial instrument, which is granted to the subscriber for the amounts that I lend, and authorizes it to recover the amount of the loan, in addition to the accrued interest, by that time. Or it is: a written pledge of the debt (loan) to the holder on a given date for an estimated interest. The difference between the share and the bond: 1. The share represents part of the capital of the company, and the bond represents part of the loan to the company or government. 2- The arrow changes its value. 3. The holder of the bond is a lender and the holder of the share is considered the owner of part of the company. Therefore, the stock gives the holder the right to intervene in the company. 4- The bond has a fixed time to pay. The share is paid only after liquidation of the company. 5- The bond at the time of bankruptcy shall be distributed in shares, and the share shall be taken by the owner after his debt has been paid. In short, the stock is useful for profit and loss. Bond: A loan instrument with fixed and fixed interest