Definition. A “Ticker Symbol” is a unique one to five letter code used by the stock exchanges to identify a company. It is called a ticker symbol because the stock quotes used to be printed on a ticker tape machine that looked like the images below. When it printed the stock quotes, it made a tick-tick-tick sound!

Common stock

Market Sectors Stocks can be categorized by the type of businesses in which the companies operate. Standard & Poor’s divides stocks into 10 broad categories, which include energy, technology, consumer staples, telecommunications, health care and financials. There can be sub-categories under the broad categories.

7 Categories to Classify Stocks

• Income Stocks. Income stocks are the least volatile classification of stocks and offer investors steady dividends.
• Penny Stocks. The term “penny stock” refers to shares that trade at no more than $5 each.
• Speculative Stocks.
• Growth Stocks.
• Cyclical Stocks.
• Defensive Stocks.
• Value Stocks.

Two of the primary types of stock are common shares, representing the majority of shares available across the market, and preferred stock, which typically guarantee a fixed dividend but do not have voting rights. One common class of stock is advisory shares.

Income stocks are stocks that offer regular and steady income, usually in the form of dividends, over a period of time with low exposure to risk. They are different from growth stocks, which have higher volatility and risks associated with their performance.

Both growth and value stocks have taken turns leading and lagging one another during different markets and economic conditions. When investing long term, some individuals combine growth and value stocks or funds for the potential of high returns with less risk.

Growth stocks are expected to outperform the overall market over time because of their future potential. Value stocks are thought to trade below what they are really worth and will thus theoretically provide a superior return.

Most people characterize Buffett as a value investor. The common usage of the term value investor connotes someone who invests in stocks that have such characteristics as low price-to-earnings (P/E) or market-to-book (M/B) ratios.

For all their potential upsides, value stocks are considered riskier than growth stocks because of the skeptical attitude the market has toward them. For this reason, a value stock is typically more likely to have a higher long-term return than a growth stock because of the underlying risk.