Uploaded May 2020 | Updated September 2026, 12 hours ago
Today I will be going over Equity. I am going to explain as much as possible from the types to the different classifications. Be sure to watch till the end where I will break down the different classifications for ordinary shares. These classifications are the ones you will note when building your portfolio around the different portfolio types such as growth and dividend strategies.
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Thanks for Watching. Here are some of my other videos
Understanding your Payslip - youtube.com/watch?v=JfzoXpe79EY
Investing 101 | A beginners Guide - youtube.com/watch?v=cdeKv8rgRNw
Investment Playlist - youtube.com/watch?v=oyLhYw9tEfQ&list=PLOjk-zbqtNmJX18dI31WpG0GQqxq5frrP
There are two main types of stock that you can purchase, preferred stock or ordinary stock. While they are both referred to as shares or stock they are fundamentally different as preferred stock is considered a debt item, meaning it is seen as a loan.
There are two types of preferred stock cumulative and non-cumulative. When you purchase preference shares it normally has an interest rate attached to it. This interest rate determines the returns that you can expect. When the term cumulative is attached this means that if the company is not able to pay the preference dividends, it will continue to add up until it is paid. With non-cumulative preference shares if the company is not able to pay the dividend when it is due then that’s it you lose your money for that period.
Ordinary shares on the other hand is the instrument that gives you an ownership stake in the business. With this you are able to vote at shareholder meetings and your voice can be heard. Just like with preferred stock ordinary shareholders are entitled to a share of the profits of the company
The main difference between preferred stock and ordinary stock is the ability to vote with ordinary shareholders getting one vote for each share that they own. While some classes of preference shares can vote it is not that common.
When you are setting up your portfolio there are a number of things to consider when investing in ordinary shares because different companies will have different classifications based on portfolio construction. Stock can be classified as growth stocks, income stocks, value stocks and blue chip. A lot of us may have heard about blue-chip stock but were not sure what it was.
Companies that are expected to grow faster than the industry that they are in are called growth stocks. These stock prices for these companies are expected to grow with the above average earnings that the company is experiencing. These companies also may not pay dividends as they will reinvest all earnings into the company to fuel its growth. These are normally younger companies who are just emerging that have lots of potential.
Income stocks on the other hand are those companies that pay a consistent dividend. These tend to be larger companies who are more established. The stock prices for these companies are also more stable and appreciate in value slowly.
Next we have value stocks. These are the diamonds in the rough. These stock are normally selling for less than they are worth. But if you do your research you will notice that these companies have good earning potential, which in turn can signal good prospects for growth in the short term.
Lastly we have blue-chip stocks. These are basically your designer stocks. I say designers stock because they tend to be well known companies that have very good reputations. If you look them up you will notice that they offer top of the line products and boasts a strong management team. They also usually pay very good dividends. But the number one reason for buying blue chip stock is because they are less risky than the other stock types.
#jamieradcliffe #equity #paymeinequity
Disclaimer: All views expressed here are my personal opinions. For more in-depth and specific information speak to a licensed investment advisor.
Today I will be going over Equity. I am going to explain as much as possible from the types to the different classifications. Be sure to watch till the end where I will break down the different classifications for ordinary shares. These classifications are the ones you will note when building your portfolio around the different portfolio types such as growth and dividend strategies.
Follow Me On Instagram: instagram.com/jaradcliffe?igshid=1ozwrpsselzwe
Follow Me On Twitter : twitter.com/Jaradcliffe2030?s=09
Thanks for Watching. Here are some of my other videos
Understanding your Payslip - youtube.com/watch?v=JfzoXpe79EY
Investing 101 | A beginners Guide - youtube.com/watch?v=cdeKv8rgRNw
Investment Playlist - youtube.com/watch?v=oyLhYw9tEfQ&list=PLOjk-zbqtNmJX18dI31WpG0GQqxq5frrP
There are two main types of stock that you can purchase, preferred stock or ordinary stock. While they are both referred to as shares or stock they are fundamentally different as preferred stock is considered a debt item, meaning it is seen as a loan.
There are two types of preferred stock cumulative and non-cumulative. When you purchase preference shares it normally has an interest rate attached to it. This interest rate determines the returns that you can expect. When the term cumulative is attached this means that if the company is not able to pay the preference dividends, it will continue to add up until it is paid. With non-cumulative preference shares if the company is not able to pay the dividend when it is due then that’s it you lose your money for that period.
Ordinary shares on the other hand is the instrument that gives you an ownership stake in the business. With this you are able to vote at shareholder meetings and your voice can be heard. Just like with preferred stock ordinary shareholders are entitled to a share of the profits of the company
The main difference between preferred stock and ordinary stock is the ability to vote with ordinary shareholders getting one vote for each share that they own. While some classes of preference shares can vote it is not that common.
When you are setting up your portfolio there are a number of things to consider when investing in ordinary shares because different companies will have different classifications based on portfolio construction. Stock can be classified as growth stocks, income stocks, value stocks and blue chip. A lot of us may have heard about blue-chip stock but were not sure what it was.
Companies that are expected to grow faster than the industry that they are in are called growth stocks. These stock prices for these companies are expected to grow with the above average earnings that the company is experiencing. These companies also may not pay dividends as they will reinvest all earnings into the company to fuel its growth. These are normally younger companies who are just emerging that have lots of potential.
Income stocks on the other hand are those companies that pay a consistent dividend. These tend to be larger companies who are more established. The stock prices for these companies are also more stable and appreciate in value slowly.
Next we have value stocks. These are the diamonds in the rough. These stock are normally selling for less than they are worth. But if you do your research you will notice that these companies have good earning potential, which in turn can signal good prospects for growth in the short term.
Lastly we have blue-chip stocks. These are basically your designer stocks. I say designers stock because they tend to be well known companies that have very good reputations. If you look them up you will notice that they offer top of the line products and boasts a strong management team. They also usually pay very good dividends. But the number one reason for buying blue chip stock is because they are less risky than the other stock types.
#jamieradcliffe #equity #paymeinequity
Disclaimer: All views expressed here are my personal opinions. For more in-depth and specific information speak to a licensed investment advisor.
