Most individuals know that owning company stocks implies purchasing a percentage of their own in the market; however, several new traders/investors need more clarification about the advantages and the responsibilities of holding shares. Several shareholder misconceptions stem from the absence of understanding when it comes to the levels of ownership that the purchased stock represents. For example, in large companies, like Apple (AAPL) or Exxon Mobil (XOM), buying one share of the company is just like having a drop from the sea. This means even if you have purchased $1 million worth of company shares from them, you will still be a small fry with the ownership of small equity in that company.
Kavan Choksi Singapore – breaking misconceptions about being a shareholder
Kavan Choksi Singapore is an esteemed investor, business, and finance expert known for his invaluable knowledge of the share markets across the globe. He is a solid presence to reckon with in the international market. When it comes to the ownership of shares, he states several traders need clarification, and this is why they often land up making the wrong decisions in the share market. It is essential for one to understand how the stock markets function and the obligations of being a shareholder. The first step, to begin with, is to break the misconceptions.
Now, the question is, what are these misconceptions about the stock market?
Common misconceptions about the stock market
He says that it is true that being a shareholder of a company means that you have a certain level of ownership rights. However, this level of ownership that you enjoy means that you get only some of the benefits and responsibilities of managing the affairs of the company that you desire to get.
No right to control
The second misconception that some shareholders have is the right to control the affairs and operations of the company. In fact, one must note shareholders enjoy no direct control of the functions of the organization. Some shareholders, on the other hand, might have voting rights, thus attaining some level of authority when it comes to controlling the ownership of the company. They include the members of the Board of Directors who have voting rights in the company.
No right to discounts
Kavan Choksi Singapore also adds that if you are a shareholder in a company, the above does not mean you are entitled to discounts in any manner. At the same time, you should also note that you have no right to seize the property or the assets of the company at will.
He sums up by stating that if you are new to the stock markets and wish to become a shareholder of any company, you should educate yourself first. Know your rights as a shareholder and before purchasing shares of a company, go through its financials and background. The stock market is no ground for the unprepared trader, so ensure you are financially educated or seek the counsel of a skilled financial advisor for the task.