Difference between shares and stocks. What’s the difference between shares and stocks? Here we are providing complete details for What’s the difference between shares and stocks?. In this article you can find what is Share means introduction of share and What is Stock and you can also find Difference between shares and stocks. Recently we are provided National Savings Certificate (NSC)
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Generally, shares and stocks are used interchangeably to indicate the certificates that denote ownership in a particular company, called stock certificates. However, the difference between the two words comes from the context in which they are used.
For carrying day today business activities every business concern needs to procure funds from many sources so that it can run its operations smoothly.
In this modern era of globalization every company around the world raise funds for their operations and future expansions through many ways like loans from banks, issuing bonds, issuing shares and . Most companies prefer to raise money through stock market by issuing shares.
“The capital that a company wants to procure through issue of shares is divided in to certain amount of units. These are called as shares of that company. A share certificate is issued to the person who subscribes to the shares of a company. Now a days these share certificates are issued in dematerialized form.”
Shares can be of different types and are issued by the company in accordance with the laws of the country in which they are issued. These shares are free to be traded on the stock exchanges and can be bought or sold through them. A person holding the shares of a company has the privilege of voting in the annual meetings as the part owner of the company. But depends on the type of shares the voting rights also be changed.
If a person is holding shares of many companies at the same time, then his holding is called stock. A stock is the total portfolio of a person which describes the number of shares he is holding in different companies.
Stocks of a company can be defined as total units of share that makes a person owner in that company.
It can be said that when we are discussing about shares and stocks we are talking about one and the same thing. Both these terms are used to indicate the amount of money one has invested in a company or many companies. Shares indicate the amount invested in one company whereas stocks indicate the money invested in one or many companies. Both entitle a person certain ownership in the company.
It is always advisable to hold stocks of different companies of different sectors rather than shares of a single company. This type of investment saves a person from risks of losing money in case one sector fares bad in its performance. As said by Warren Buffet ” Don’t keep all your eggs in one basket “.