Advantages of Stocks

There are so many advantages of stocks, especially for the long term investors, some of which are;

Advantages of Stocks

  • Part Owner of the Company: If you own stocks of a company no matter how large the company is or how small your stocks are, you become a part owner of that company. You can be proud to call it your company.
  • Dividends: As part owner of any company you share in the firm's profit and in their losses in a way. Dividend is a periodical payment of profits to stock owners. As companies make profits they set aside some portion of such profits to pay stock owners, as returns from their investments.
  • Profit: You have the right to sell your stocks at a higher price than you paid for, whenever you deem it fit. Learn how to trade stocks.
  • Appointment as a Director: There also the possibility of becoming a director or even the chairman of the company depending on the amount of shares you have. Most of the directors are appointed based on the amount of stocks owned in that company.

Some other advantages of stocks are:

  • Bank or Loan Colleteral: Most banks do accept as collateral, as such you can use your stock certificate as collateral secure bank loans.
  • Inheritace:  Offers the possibility of transfering your investments (stocks) from generation to generation.
  • Limited Liability/Loss: In the event of liquidation, liability of the stock holder is limited to the amount invested.
  • Investment Leverage: You can use the stocks as an investment leverage.

As in every Investments, there is always the pro and the con, so please bear in mind that since there is advantages in owning stocks there is also the disadvantages of shares.

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