Friday, May 20, 2011

Types of Investment: 1 - Stocks

When I first started out I found it easy to buy stock. Log onto the broker. Click buy. Done. It took a lot longer to figure out what exactly I ended up getting when I click the buy button. You get a whole lot more then just having the share price of your stock go up and down...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

The voting rights that come along with stock ownership aren't talked about much. I didn't even know about it until I received emails to log onto websites to cast my vote.  To be honest, the first couple notices I received I thought they were phishing attempts to steal my identity and I ignored them. 

I think the topic of voting rights gets blown off because a company can have millions to billions of shares. How much voting power does the little guy have? Well if we look at it from a political voting viewpoint 1 vote is 1/300millionth of the say in who becomes president of the United States. For some companies 1 share has as bigger say then political voting and an investor isn't going to be limited to only one share/vote.

Another thing to keep in mind, all the outrage of CEO pay? The shareholders let the CEO's get away with it. If enough shares back up a request to bring a motion forward for all shareholders to vote upon... it can limit pay on board members which includes the CEO. If I recall correctly, this happened to Coca-Cola a few years back when shareholders brought a motion forward to vote on limiting CEO pay.

No comments:

Post a Comment