What are the 4 types of stocks?

So you are thinking of starting investing in the stock market and confused that what type of stocks you should have in your portfolio, don’t worry we will explain you 4 types of stocks that you should watch out for a solid portfolio. And if you are a beginners and starting an investment journey in the stock market you should choose a stock market basic course where you can learn all the stock market basics and cam clear your doubts and can prepare yourself fully before entering into the market.

And when you are choosing type of stocks which you will put in your portfolio you should also know What are the Important Ratios you must know before Investing to make sure you are invested in good fundamentally strong stocks.

Here are 4 types of stocks everyone needs to own -

1. Growth stocks

These are the stocks that you should buy for the capital growth, these stocks gives consistent return to their shareholders. These companies are generating positive cashflows and whose earnings are expected to grow at an consistent rate relative to the market. These should be in your portfolio as when the market is in boom phase these stocks will rise at a very steady pace and will make you good returns.

1. Dividend Stocks

Dividend stocks are the type of stocks which give some portion of the profit as dividends to their shareholders. They are the stocks of choice for the income-seeking investor. These stocks should be in your portfolio as they will create extra income apart from the appreciation of stock.

When you will have a portfolio of crores then you can get enough money as a dividend that you can manage a good life with the dividends only.

1. New Issues

It is also known as Initial Public Offerings or IPOs, in this process company makes their entry in the market and make their shares or stocks available to the public. Once they are listed on the share market anyone can buy or sell it but what is lucrative is getting an allocation in the IPO before the stocks get listed on the market. And if you get shares in IPO then it can make you wealthy if its a fundamentally strong stock and if you hold for long term.

1. Defensive Stocks

These are the stocks which don’t fall much when the market is in pressure because they sell consumer staples. These stocks provide consistent dividend and have a stable earnings report and these are very safe to invest in.

Whether there is a recession or not you wont stop going to supermarts to buy groceries which are important. But don't overload defensive stocks, these can under perform also for sometime.

My name is Anubhav and i write articles on multiple topics. Thanks for showing support.