SHARETIPSINFO >> Articles Directory >>What are the different types of stocks available in the market and what are bear and bull market.


Options Are Wide – Make Your Mind Before Investing

There are different types of stocks that are traded in the stock market. The classification of stocks is done on different factors.

Stocks Based On Classes

Many things depend on the classes of stocks. Mainly it is the voting rights of the stock holders in the company decisions that is the most crucial criteria of the stock classes that effect the stock holders directly. While in most cases a stock gives the share holders right for one vote, there are other classes that give the stock holders capacity to cast more than one vote. There is also a class of stock that gives the stock holders no voting rights at all. This is done by the primary stock holders or the founders of the company to retain control on the running of the company.

Stocks Based On Market Capitalization

Stocks are also classified based on the capital of the company in the market that is the total lilangeni value of the company’s outstanding shares. This is calculated by multiplying the current price of the stock of the company with the total outstanding shares of the company in the market. Roughly there are three different types of stocks that are categorized on the basis of market capitalized - Large Cap, Mid Cap and Small Cap. Large Cap stocks have market cap of highest value, Mid Cap stocks have mid range market cap and the Small Cap stocks have market cap of lowest value.

Sector Stocks

There are certain stocks that are grouped on the basis of the sector that is the type of business that the company is in. There are different sectors like finance, banking, steal, power, consumer goods and so on.

Cyclical Stocks

These are the stocks that behave accordingly to the business cycles. The profit of these companies rises and falls in tune with the business cycles every year.

Defensive Stocks

Defensive stocks are the stocks that perform well even in the poor economic conditions. That means these products are services enjoy steady demand in the market throughout the year and does not depend on business cycles and overall market conditions.

Tracking Stock

It is type of common stock that is tied to its subsidiary. The dividend and the capital gain of the stock depend largely on the subsidiary instead of the company as a whole. Owning of a tracking stock does not give the owner voting rights to the company.


Whether Bull Or Bear Market You Can Earn Profit With A Smart Investment Strategy

Stock markets always go through market trends. Market trends is determined by the general temperament of the buyers and the sellers. The major or the primary trends of the stock market is the bullish or bearish market. Bull or the buyer and bear or the seller who ever is more active at a point of time is said to govern the market.

A bull market is when the investor confidence is at the peak. Generally a stable economic condition of the country and a steady growth in the stock prices initiate the bullish trend in the market. The steady growth in the market prompt the investors to invest in stocks and a steady flow of cash in the market further make the market more bullish in nature. At this point the market rises in a pace that is higher than the conventional speed. Till date the bullish market of the 1990’s has seen the biggest growth.

A bearish market is initiated by the fall in the stock prices for different reasons. In a bearish market that is initiated by the steady fall of the stock market, there is a panic amongst the buyers and there is always more number of sellers in the market than the buyers. In bearish market, investors desperately try to sell the stocks that they are holding to save some of their money that they have invested in the stocks. The general pessimism in the market and bulk selling by the investors further fuel the downward movement of the market.

Investors at most times confuse the bearish market with the correction phase that is also a secondary market trend. But in fact, correction is a much shot lived phase compared to the bearish market. In correction phase the overvalued stocks come to the price level that is perfect for that stock. Whereas, in a bearish market the stock prices come to much lower levels and break all the barriers.

Apart from the general market trends a particular stock and sector can also become bullish or bearish in nature. This normally happens when there is specific news about that particular company or the sector. Apart from these primary market trends there are also some secondary market tends that come in existence from time to time like correction, bear market rally and secular market trends.

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