What does owning a stock actually means?

Posted by Nayna Bhardwaj on June 27th, 2018

Stock market is a place where existing owners of the stocks can transact with potential buyers. Trading in stock market is not very easy because it is a volatile place and making any kind of transaction is very crucial task, therefore trader seek for guidance and market relates updates. To gain investment ideas traders have started taking financial services like commodity tips and other market relates services. Owning a stock has a different meaning than what beginner traders think.

There are people who are aware that owning a stock means buying a percentage of ownership in the company, but there are few misconceptions in many new investors about the benefits and responsibilities of being a shareholder. There misconceptions are built due to lack of understanding for the amount of ownership that each stock represents. One share only stands a drop in the pond for large companies like Apple.

So, let’s take a look at the biggest misconceptions about being a stockholder or shareholder.

1. I am the boss: This is the first and most common misconception for which you better not think that you can share certificates into the corporate headquarters to boss and higher management people around and demand for a corner office. You have chose to buy the stock and as a owner of the stock you have placed your faith in the company and how the company handles the different situations. If you are not happy with the company or its management then you can always sell your stocks, but if you are happy then you should keep your stocks and hope for the good returns.

Company’s stock will perform well is not guaranteed, but this is the way which used by the company to give their executives an incentive to maintain or increase the stock's price

2. I get a discount on goods and services: This is the another misconception in which the ownership in the company translates into discounts. Now, there are definitely some exceptions to the rule. However, the only thing you can get with the ownership rights of a stock is the ability to participate in the company's profitability.

3. I own the chair, desk , the pen and the property etc.:As an investor in the company you own a portion of the company, no matter how small the portion is. However, this does not mean that you own property of the company.

These are the some misconceptions which new investors have when they own a stock. However, Investing in market is very beneficial if you have can understand the market changes and its working. Stock tips are preferred by traders who want to trade in stock market with less chances risk. Also before investing you should remind yourself of the common misconceptions about ownership powers.