An Insight to the Disadvantages of the Stock Market

The stock market is a very competitive and risk driven business. The term Stocks and Shares should’t be new to most people and as such you should have even the tiny glimpse on how these equities operate in case of its crashing.

Previously, I had discussed thoroughly about Stocks and what it encompasses. In the previous article, I explained that Stocks emanate when Corporations (businesses) issue (sell) stock to raise funds to operate their businesses. The holder of stock (a shareholder) then buys a piece of the corporation and has a claim to a part of its assets and earnings.

In other words, a shareholder is officially an owner of the company issuing the stock (s). Ownership is therefore determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company’s assets and earnings (paid annually — first quarter, second quarter, etc).

I discussed that major benefits of owing stocks include: voting right, growing your money, easy purchase, and more amazing benefits you could even think of. How exciting right? But I didn’t explore the disadvantages that happen when it comes to owing stocks. Well, that’s why I’m writing this from the…