Lest you get confused, this is the difference between preferred stock and common stock

Lest you get confused, this is the difference between preferred stock and common stock
Lest you get confused, this is the difference between preferred stock and common stock

business.iconewsmedia.com – In the midst of a similar pandemic today, although the economy has in fact shrunk, the number of investors, both stocks and mutual funds, is facing a significant increase.

Not long ago, there was so much about stocks among young people. Until there is a meme like this “TL contains only bali-share-bali-shares”. The hype is really, really

In addition to that, there are also a lot of influencers talking about stocks, which is also supported by the emergence of various investment apps.

Earlier, we discussed stocks in the startup world. This time, we will discuss actions of a more general kind.

In today’s era, financial management planning has become commonplace. If the dialogue occurs over a very long period of time, stocks are one of the main ones because they are considered more valuable and can make huge profits compared to other financial instruments.

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Many millennials and Gen Z have been discouraged from investing in stocks.

But do you understand what an action is?

Referring to the Great Indonesian Dictionary, Shares are a de facto message of ownership of part of the capital of a limited liability company that grants rights to dividends and others for the size of the paid-up capital.

How are you? you’re pretty clear about stocks, right?

Well, this stock also has various types. When viewed through type, the shares are divided into 2 common shares and preferred shares. So what is the comparison of the two actions?

Preferred shares have the advantage of being considered more desirable than common shares. Because preferred shares have the right to claim industrial wealth and dividend distribution first. The downside is that this type of stock is difficult to trade because the amount is small compared to common stock.

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On the Indonesian Stock Exchange, the difference between preferred shares and common shares is very easy to distinguish. The trick is to look at the stock code. The stock code that has a bonus letter “P” means that the stock is preferred stock. By contrast, common stock does not increase the letter “P” in the code.

In more detail, common shares are shares that put the owner last in the distribution of dividends and rights to industrial assets if the industry is liquidated (industrial dissolution).

This is because the owner of the common shares does not have any special rights. On the other hand, preferred shares have special rights and dividend distribution rights at all times. This is because preferred stocks are stocks that have the characteristics of a combination of bonds and common stock, so that they can generate a constant income (a kind of bond interest).

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Stocks are a promising option because they provide a higher return (reciprocity) compared to other financial instruments.

According to its profile, not only reciprocal, shares also have a great effect compared to other instruments or known as high risk, high return.

How is it that you are quite satisfied with the description of the types of actions?

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