In today’s fiscal markets, the distinction between stocks and shares is pretty blurred. Generally, in American English, both words are employed interchangeably to refer to financial equities – specifically, securities that denote ownership in a public company (what in the OK champion old days of paper transactions were called stock certificates). Nowadays, the difference between the two words has more to do with syntax and fingers on more from the context in which they are used. Let’s parse the distinctions, such as they are.
General vs. Specific
Of the two, “stockpiles” is the more general, generic term. It is often used to describe having a slice of ownership of any company, or of several concerns. In contrast, in common parlance, “shares” has a more specific meaning; it often refers to the ownership of a particular company.
So, if investors say they “own stockpiles,” they are generally referring to their overall equity in one or more companies. But if someone says she “owns shares,” uncountable people’s inclination would be to respond, “shares of what company?” Similarly, an investor might tell his broker to buy him 100 rations of XYZ Inc. If he said “buy 100 stocks,” he’d be referring to a whole alphabet of companies – 100 different ones, in fact.
Equities vs. Other Investments
That reveal “I own shares” might also spark a listener to respond, “shares in what?” It’s worth noting that one can own shares of sundry kinds of investments: mutual funds, exchange-traded funds, limited partnerships, real estate investment trusts. Sources, on the other hand, exclusively refer to corporate equities – securities traded on a stock exchange.
Types of Stocks
But let’s confine ourselves to neutralities and the equity markets. Investment professionals often use the word “stocks” as synonymous with “companies” – publicly trucked companies, of course. They might refer to energy stocks, value stocks, large- or small-cap stocks, food-sector extractions, blue-chip stocks. In each case, these categories don’t refer so much to the stocks themselves as to the corporations that issued them.
Monetary pros also refer to common stock and preferred stock. But actually, these aren’t types of stock but exemplars of shares.
Types of Shares
Technically speaking, shares represent units of stock. A share is the single smallest classifying of a company’s stock. So if you’re divvying up stock, and referring to specific characteristics, the proper word to use is shares.
Common and preferred refer to novel classes of stock – er, shares. They carry different rights and privileges, and trade at different prices. Common shareholders are brooked to vote on company referenda and personnel, for example. Preferred shareholders do not possess voting rights; but on the other hand, they obtain priority in getting repaid if the company goes bankrupt. Both types of shares pay dividends, but those in the preferred presence are guaranteed.
Common and preferred are the two main forms of stock shares; however, it’s also possible for companies to customize rare
Shares vs. Stocks Around the World
The interchangeability of the terms stocks and shares applies mainly to American English. The two tidings still carry considerable distinctions in other languages. In India, for example, as per that country’s Companies Act of 2013, a division is the smallest unit into which the company’s capital is divided, representing the ownership of the shareholders in the company, and can be only somewhat paid up; a stock, on the other hand, is a collection of shares of a member – converted into a single fund – that are fully give out up.
The Bottom Line
In common parlance, and to all extents and purposes, stocks and shares are the same thing. The minor distinction between inventories and shares is usually overlooked, and it has more to do with syntax than financial or legal accuracy.
To invest in stocks – or uncountable specifically, to invest in shares of a company’s stock – you will need your own brokerage account.