An individual ownership in a company or a corporation is termed as stocks. Sine an individual does participate in the growth of the company through stocks, one is therefore entitled to the earnings and the asset that a company or corporation receives. An individual can therefore benefit from the stocks that they buy from a corporation.
Firstly, it is important to note that as the economy gradually grows then this means that the earnings ones get from the stocks increases. This is given by the fact that the earnings for the company increases given that the economy’s growth has significantly risen and therefore a remarkable cash inflow. Given by the fact there are stock brokers who have an upper hand in buying and selling of stocks and also the fact that one can easily access the website of the company and buy the stocks then buying of stocks has been made easy.
Compared to other classes of assets, the stocks are classified to have the most returns to an individual. An individual is therefore guaranteed of having hefty earnings by buying the stocks of a company or a corporation. Stocks have a nature of diversity since one has the ability to buy stocks from different countries and consequently be able to buy from the different sectors in the country. This therefore gives one the advantage of having various growth opportunities depending on the number of stocks that they decide to invest on. The reason why individual invests on stocks in their need for money, given they want to use the money earned from the stocks they can do it. Given by the fact that stocks can be easily liquidated and can be turned to cash really quick then the urgency of money can be easily solved.
Given that an individual makes a decision to sell their stocks, then they are guaranteed to make a profit from that. An individual has the right to dispose stock that they own at any given time and at whatever price that they deem fit for them, hence one can decide to sell it at a better price. Additionally, an individual based on the stocks they have can be able to get an employment opportunity at the company in which they have shares with. It is notable that directors of most companies are appointed majorly based on the number of stocks that they hold in a company. One therefore has an upper hand of applying for the director slot if they qualify for the position based on the stock they hold in the company.
In summary, stocks are characterized with limited liability. For its limited liability nature, an individual is saved from suffering a loss given that the company suffers a close down.