The very meaning of a stock certificate ownership

When you buy an ownership in a company, this ownership is represented by stock certificates in the form of a physical piece of paper. As far as this document is a valuable point, you should know the ways you obtain it, ways to protect it and ways to renew it in case of losses. All this and some more information you will find in the written below. Knowing the stock peculiarities will certainly be useful for any investor.

To know your benefits and responsibilities, when it comes to being a shareholder, you should, first of all, realize that a stock certificate gives you a percentage of ownership in the company. The thing to realize before any other is to know the amount of ownership that each stock represents for your ownership not to become a drop in the pond. Surely, it concerns those investors, who are aimed at becoming a considerable contribution in some particular company. You should mind that only considerable contributions are taken seriously into account. Only in case of a serious deposit of yours, your thoughts about the further development of the company can be considered. However, even small contributions can be a success, when knowing the strategy of the company and its politics for the nearest ten years.

Investing in a giant like IBM, for instance, you may be sure to get shares with prospects. Although even if you are a million shares' holder, you cannot feel yourself being a boss. You are no one more, but a shareholder only. Buying a stock certificate of a company, in your first turn, you agree with its rules and management behavior. If you are not satisfied with this or another factor, you can always sell your share, but you can doubtfully count on management politics to change the way you want it to.

Not to loose your legal returns from the stock certificate, you should mind the rises and falls of stock prices. There are situation when companies create situations to increase their profits. Giving the executives an incentive to maintain or increase the stock's price, the company can also increase artificially the stock's price and then quickly sell out the personal holdings for a profit. To stimulate the work of executives, the stock compensation method is considered. The theory is that executives will work harder, since they want their own stock to rise in value and have the best interests of shareholders in mind. A stock compensation payment of stock in lieu of cash for services provided is practically applied.

If not managing the company directly, owning a stock certificate gives the right to it shareholder to vote for those directors who do. This way you may take part in controlling the shape and direction of the company, even though this say is not a direct control.

The other advantages of stock certificate include possibilities for investors to replace lost or stolen certificates. If your securities certificate is lost, accidentally destroyed or stolen, brokerage firms, banks, transfer agents and corporations have procedures to help you with that. You immediately contact a transfer agent and request that a "stop transfer" be placed against the missing securities. Your broker may be able to assist you with this process. The "stop transfer" helps prevent someone from transferring ownership from your name to another's. The transfer agent or broker-dealer will report the certificates missing to the SEC's lost and stolen securities program. You can also get your certificate renewed, but be sure to copy the available certificate.

If the certificate you expect through the mail does not arrive, you should immediately contact the organization that arranged the transaction, which typically is your brokerage firm. The losses like this may take place if your certificate is sent with a regular mail instead of a registered or certified one.

To conclude, the only one thing is left to mention is the diversification of your stock certificates. You are to minimize your risks as soon as you diversify your stock portfolio. Nothing is more stabilizing than you being sure in your investments variety. While one may loose, another may bring considerable returns, and you will remain a winner anyway.

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