What are shares and its strategy

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 What are shares and its strategy

"Shares are essentially certificates of ownership in a company. If a company wants to raise capital, then it can issue and sell shares to investors. The more shares of the company you buy, the tinier the percentage of the part of ownership of the company you will have. The more shares one has, the greater the stake he has in that company."

Some of these shares have their own individual benefits. A proportion of the profit may be distributed to all shareholders as dividends. Moreover, if everything goes well in the company, the value of your shares may climb up after a certain time—that is, capital appreciation. This means that you can sell them at a later date for a profit.

Another advantage associated with the ownership of shares could be voting rights. Most shareholders get to vote for some of the important company decisions, such as board members or significant business issues. The number of votes you get is normally directly proportional to the number of shares one holds.

For example: Think of any company as a pizza. Now, dividing the pizza into pieces can be considered issuing shares. Every share would represent a certain slice of pizza. The more slices you have—that is, the more you own in shares—the higher your ownership stake is. Much as with pizza, shares offer enjoyment in the form of gains and the possibility of influence through votes. But remember that the share price may swing up or down, and it is possible for a company to go bust, meaning all—but hopefully not all—of your investment could be lost.

Shares

FEATURES OS SHARES

1. Ownership Stake:

Shares are the units of ownership in a company. The individual shares you own represent a small part of the total assets and earnings.

The more shares owned, the greater will be your ownership stake. This means you have a greater claim to profits and residual value of the firm's assets during liquidation.

2. Profit Potential:

Companies distribute a portion of their profit among the shareholders in the form of dividends. These are periodic payments, normally declared by the board of directors and paid according to the number of shares each investor has. 
While they are not guaranteed and their payment is solely dependent on the discretion of the company's profitability, they offer a different way to earn a return on your investment than share price appreciation alone. 

3. Capital Appreciation:

The intrinsic value of a share is known as its share price, and it varies relative to the performance of the company, market conditions, and general economic factors.
If the fortune of the company improves, its share today may appreciate. Then there will be capital appreciation, enabling one to sell the share at that higher price later for profit compared to the purchase price.

4. Voting Rights:

Again, owning shares in most cases gives a person the right to vote on critical matters within a company. These may include the election of extra board members, major acquisitions or expansions that the company would embark on, changes in the policies of the company, and so forth.
In most cases, one's voting power is determined by the number of shares he or she holds. The more shares owned, the higher the extent of voting power.
Voting allows participation in the direction of the company and probably in effecting decisions that might impact its success, and hence the value of your shares.

5. Transferability:

The shares, unlike physically owned assets such as a building, are readily liquid. They can easily be bought and sold on stock exchanges through brokers.
This would enable you to enter or withdraw your investment in the company at reasonable speed, based on the market situation and your goals in making such an investment.

Additional Points:

The different classes of shares may have different features. For example, some shares can be very generous in their dividend payments with restricted voting rights, while others would have strong voting rights but with reduced or no dividends at all.
Having shares comes with inherent risks. The share price can fall. If you sell your shares below the price, you bought them for, capital losses will be encountered.
Additionally, the company might go bankrupt, where you will lose the entire amount of your investment.

DIFFERENCE BETWEEN SHARES AND STOCK

FeatureSharesStock
DefinitionA single unit of ownership in a companyA collection of shares representing ownership in one or more companies
SpecificitySpecific to a particular companyMore general term encompassing ownership across companies
IssuanceIssued by a company to raise capitalNot directly issued, but refers to the collection of shares held by an investor
Nominal ValueMay have a nominal value (a par value assigned at issuance)No nominal value associated with stock itself
OriginShares are the original unit of ownership offered by a companyStock represents the overall portfolio of shares held by an investor
ScopeNarrower scope, refers to ownership within a single companyWider scope, refers to ownership potentially across multiple companies
ExampleOwning 100 shares of Apple (AAPL)An investor's stock portfolio might include shares of Apple (AAPL), Tesla (TSLA), and Amazon (AMZN)

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