Bonds and Stock Essay

1288 WordsDec 16, 20136 Pages
ACCT 410 B Bonds and Stocks In the financial world there are many ways to devote your capital: from investing in real-estate to investing in the stock market. In this report we will take a look at what is a stock and what is a bond. Then examples will be given of the types of bonds and their meaning. Starting off is a Stock. What is a stock? To put in plain and simple, a stock is a share in the ownership in a company. When you own a share of stock, you are part owner in company with claim to every asset and every penny in earnings (CNN Money,n.d). As more stock is acquired, the ownership stake in the company becomes greater. Stock can also be referred as shares or equity or just stock, they all mean the same thing. Over the last few decades, the average person's interest in the stock market has grown exponentially. What was once a toy of the rich has now turned into the vehicle of choice for growing wealth. This demand coupled with advances in trading technology has opened up the markets so that nowadays nearly anybody can own stocks. As a buyer, you have three different options when it comes to hiring a broker to help with buying stocks which are full-service brokers, discount brokers and online brokers (CNN Money, n.d.). The difference between brokers would the cost and the type of service you would receive. Holding a company's stock means that you are one of the many owners shareholders of a company and, as such, you have a claim albeit usually very small to everything the company owns. Yes, this means that technically you own a tiny sliver of every piece of furniture, every trademark, and every contract of the company. As an owner, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock. A stock is represented by a stock certificate. This is a fancy piece of paper that is proof of your ownership.

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