| There are so many different types of stock | | | | companies with revenues between $100 million |
| out there that many first time investors have | | | | and $500 million. The majority of publicly |
| a hard time choosing their investments. Most | | | | traded companies are small-cap. Mid-caps are |
| simply turn to the advice of someone they | | | | those with revenues between $500 million and |
| trust. This isn't a bad idea, but you should | | | | $3 billion, while large caps top $3 billion. |
| also take the time to learn about the | | | | |
| different stocks for yourself. After all, | | | | Blue-chip stocks are the largest cap stocks |
| this is your money. | | | | out there. They are the top of the pile. You |
| | | | have to know that all blue-chip stocks are |
| In part one of this series, we talked about | | | | large-cap stocks, but not all large-cap |
| some basic types of stocks: growth stock, | | | | stocks are blue-chip. There are a lot of |
| value stock, speculative stock and preferred | | | | advantages to blue-chip stocks, including |
| stock. Let's move to some more complex | | | | liquidity, earnings and staying power. |
| stocks. | | | | |
| | | | You can also purchase non-U.S. stocks through |
| Convertible preferred stocks start off as | | | | American depositary receipts. Though that is |
| preferred stock, but it can be converted into | | | | probably beyond a beginner's level of |
| a common stock. Because of this, convertible | | | | investing. |
| preferred stock will react to the growth of | | | | |
| the company more than a regular preferred | | | | When it comes to investing in stocks, the |
| will. | | | | type of stock you invest in is important. |
| | | | Take your time in assessing what you want to |
| A cyclical stock is paired rather closely | | | | get out of your investment. What type you |
| with what is happening in our country's | | | | choose depends on your financial goals and |
| economy, and sometimes even in those | | | | personal risk level. Look for stocks that |
| overseas. You will see steel companies and | | | | perform to your investment standards. If you |
| original equipment manufacturers. It takes a | | | | want a lot of quick growth and don't mind the |
| bit of financial knowledge to be able to | | | | risk, perhaps you want to put some money into |
| trade in cyclical stocks. You must also take | | | | a speculative stock. If you want something |
| the time to watch the economic indicators. | | | | solid that will give you a dividend no matter |
| You will usually see these stocks rising with | | | | the future performance of the company, you |
| growth. If the economy isn't doing well, you | | | | might want to shop for preferred stock. |
| won't see the earnings you desire. | | | | |
| | | | The key is in knowing the pros and cons. You |
| All of the Cap stocks stand for | | | | have to understand the risk. And they all |
| capitalization stocks of different sizes. The | | | | have risks. Remember, if you choose wisely |
| different sizes equal different returns, in | | | | and invest for the long haul, the stock |
| general. Micro-caps are companies with $100 | | | | market is an excellent place for your money |
| million or less in revenue. Small-caps are | | | | to grow. All it takes is time and knowledge. |