Advantages And Disadvantages Of Stock

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A stock is a type of ownership as they represent contribution to a company’s growth. Normally, investors are given no promises about any returns of the initial investment. Indeed, the investment profitability depends almost entirely upon rising stock price, which, at the most essential level, directly relates to the growth and performance of the company.
The advantages of stocks are:
i. The stock rate is bound to rise and fall on a daily basis.

ii. The stocks are liquid. It means that the stocks are readily to be sold or bought at a lower price.

iii. The potential loss from stock bought with cash is quite limited to the overall amount of the initial investment. Some leveraged transactions will be more good, where the maximum loss is observed and exceeds the overall invested of funds.

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Stocks have the potential of delivering huge amounts of gains compared to certificate of deposit and bonds.

v. It also offers two ways for their owners to gain benefit, which is by capital gains and dividends.

The disadvantages of stocks:
i. The investors will be quite frustrating when they are trying to find out the actual performance and fundamental of company because suddenly the stock values change for no apparent reason.

ii. Prices of stocks tend to be volatile as well. Prices can be rises and declining fast. When declining happen, the investors will be panic because they will gain losses on that stocks that are buy.

iii. Investors may not know or lack about the company’s stocks. Due to this insufficient information, making an investment decision will be

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