Ordinary shares, also known as common shares, represent ownership in a company and give shareholders the right to vote on company matters and receive a portion of the company's profits in the form of dividends. Here are some advantages of owning ordinary shares:
Voting Rights: Ordinary shareholders have the right to vote on important company decisions, such as electing the board of directors or approving major business decisions. This gives shareholders a say in how the company is run.
Potential for Capital Appreciation: Ordinary shares can increase in value over time, which means that shareholders can make a profit by selling their shares at a higher price than they paid for them.
Dividends: Companies can pay dividends to their shareholders, which are a portion of the company's profits. Ordinary shareholders are typically eligible to receive these dividends, which can provide a regular stream of income.
Liquidity: Ordinary shares can be easily bought and sold on stock exchanges, which makes them a relatively liquid investment.
Limited Liability: Shareholders' liability is limited to the amount of their investment in the company. This means that shareholders are not personally responsible for the company's debts or liabilities.
Overall, ordinary shares can be a good investment for those seeking potential long-term gains and a say in company decision-making. However, like all investments, there are risks involved and it's important to do your research and consult with a financial advisor before investing.