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What are securities and stocks? Simple explanation and differences between stocks and equities

If you are interested in the world of economics and investments, surely you have heard of securities and stocks. But what are they exactly? In this article, we will explain to you in a simple and clear way what securities and stocks are, their differences and how they work.

What are actions?

Shares represent a share owned by a company. Those who buy a share become the owner of a small part of the company and are entitled to part of the profits (dividends) and to vote at shareholder meetings.

The shares are listed on the stock exchange and their price varies according to supply and demand.

What are securities?

Securities are financial instruments that represent a debt owed to those who buy them. Those who buy a security lend money to the issuer (which may be a State, a company or a public body) and in return receive an interest (the yield). Securities can be bonds, i.e. medium or long-term securities, or government bonds, issued by the State to finance its business.

Difference between stocks and equities

The main difference between stocks and securities is that the former represent a share owned by the company, while the latter represent a debt. In addition, the return on the shares depends on the company’s profits, while the yield on the securities is established in advance.

How do the actions work?

The shares are listed on the stock exchange and their price varies according to supply and demand. Those who buy a share become the owner of a small part of the company and are entitled to part of the profits (dividends) and to vote at shareholder meetings. The shares can be purchased directly on the stock exchange or through a financial intermediary.

How do the securities work?

The securities can be purchased directly on the stock exchange or through a financial intermediary. Those who buy a security lend money to the issuer and receive interest (the yield) in return. The yield on securities is established in advance and may vary depending on the duration of the loan and the economic situation of the issuer.

What are bonds?

Bonds are medium or long-term securities issued by companies or public bodies to finance their business. Those who buy a bond lend money to the issuer and receive interest (the yield) in return. Bonds are less risky than stocks, but offer a lower return.

What are the actions in grammar?

In grammar, actions are the verb. The verb indicates an action or a state and is conjugated according to time, mode, person and number. Verbs can be transitive or intransitive, active or passive, regular or irregular.

Tips

If you’re interested in investing in stocks, it’s important to do thorough research on the company you want to invest in. It analyzes its financial statements, its strategy and its position in the market. In addition, it is important to diversify your portfolio, investing in companies from different sectors and in securities of different types (stocks, bonds, etc.). Finally, it is important to have a long-term vision and not be influenced by short-term market fluctuations.

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