Many different traders have different goals they are aiming for at the market and due to that fact stocks are created to accommodate all those different types of traders. General idea is in categorization of all available stocks so traders can easily find their type of stocks and use them for trading without a lot of time wasted on searching those stocks. Categories of these stocks are:
- Blue-chip stocks are your typical strong stocks of large and stable companies that have steady earnings, companies like IBM, Microsoft and so on. To earn from this kind of stocks you will have to wait for dividends due to lack of higher growth rate. Large earnings may happen rarely, and only by buying these stocks in time frames with overall depression of stocks and in bear market ( example of such case is in late 2008 and the beginning of 2009 at the peak of economic crisis ).
- Income stocks grow with their companies at a steady pace, and dividents earned from them grow as well. Companies with income stocks have large dividents payout ratio due to lack of opportunities to invest money in such companies. Over time a lot of these companies and these stocks become blue-chip stocks and companies.
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