Stocks

Stocks, or shares, represent units of ownership equity in a company. Stocks give shareholders voting rights as well as a guarantee of the equal distribution of profits in the form of capital gains or declared dividends. There are two types of shares: common and preferred. The main difference between the two is that common shares have voting rights, while preferred shares do not. Interestingly, preferred shares carry the name because holders receive preference during dividend payouts and in the event of liquidation.

As the markets adjusted to the end of the 2007/08 global financial crisis, the prices of FANG (Facebook, Apple, Netflix and Google) stocks started to edge higher, providing the cue for the entire market. The stocks continued to soar higher and higher, posting double-digit growths in 2017 on the back of strong earnings. They managed to drive the benchmark S&P 500 Technology Select Sector index up by 34.57% that year alone. When stocks rally, it means that investors are willing to pay higher prices to own equity in the underlying companies. In 2018, when the US-China trade war headlines dominated the wires, the stock market started to experience volatility and the shares of FANG companies trended sideways to lower.