Stock Market Investing 10 Minute Guide

Kinds of Stock

The stocks themselves get a little more complicated than the paint job scenario just mentioned. There are different kinds of stock, and they are differentiated by some very fine print. While all stocks represent ownership of shares of a company, they aren't all alike. A stock can be an actual document or a virtual notation on someone's computer. Here is a list of stock categories:

• Blue Chip Stock.  

  A share of one of the most established and financially secure companies in the country.

• Secondary Stock.  

  A share of a company with substantial backing that is not quite considered blue chip.

• Income Stock.  

  A stock that is usually characterized by its issuing company's focus on providing higher dividends .

• Growth Stock.  

  The stock of a company that is still small but is believed by its shareholders to have great growth potential.

• Penny Stock.  

  A highly speculative stock in a company with little or no real value other than its uncertain growth potential.