Millionaire Acts

Are you a stock trader? If you are, then probably you know how stock market works. How’s your stock trading? What are the stocks that you buy? What criteria do you consider before you buy a stock? Do you use technical graphs to predict what stocks are attractive to buy?

We all know that stocks are risky. You never know what will be the value of your stocks the next day. It can go up but it can one day be useless. Generally, there are three types of stocks.

It’s important to be familiar with the different types of stocks so you can understand how risky each one is.

Income Stocks. Income stocks typically pay a higher dividend than average. They are good for people looking for regular revenue to pay for things like retirement or college expenses. Dividends give incentive for investors to purchase stocks in companies that no longer need to use their profits to fund growth. You won’t get rich from trading income stock because both companies and their stock prices are generally pretty stable. However, the trade-off is an income you can count on.

Income stocks are the best type of stock that you might want to buy if you have a huge pile of extra cash that are of not in immediate use as this type of stock may be a good source of passive income.

Growth Stocks. Growth stocks have prices that rise faster than normal. They tend to be up-and-coming companies and are more unpredictable. Growth-stock investors are willing to take the chance they will continue to appreciate and not take a dive.

Growth stocks are sometimes scary because it may be a subject for stock manipulation by some group of investors. So be careful when you are buying this type of stock. Remember to always monitor it especially if you are unfamiliar with the company. You never know you might wake up someday and the stocks that you hold don’t have any value anymore.

Value Stocks. Value stocks are those bought for less than the company is worth. For some reason, the market doesn’t like that particular stock but you as an individual think the market has misjudged it.

Value stocks are hard to assess because you don’t know how much is the company’s truly worth. Sometimes, stocks become value stocks because of the market sentiment. The economic recession led to a lot of investors to dump their stock holdings causing these stocks to reach low levels of prices. If you are a regular stock trader, you would notice what some of the value stocks are when they fall below their usual prices.

Now that you know what the three types of stocks are, which of these three can you consider your most favorite stock? Is it an income stock, growth stock, or value stock?

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