To acquire a clear and concise understanding of the stock market, it always helps to have an in-depth knowledge of its basic concepts. Before we move on to understand what a stock market is, let us examine the meaning of the word, ‘stock.’ In economic terms, a stock is the smallest unit of ownership that a corporation offers to willing investors. If an investor owns a portion of the company, he/she shares the ownership of the company with other shareholders.
Shareholders don’t just share part of the company, they also have a say in important matters of the company; for example, the right to vote for the members of the board of directors. A shareholder also has the right to demand the company’s annual reports whenever he/she desires.
A company cannot take a shareholder for granted. Most of the profits that the company makes need to be distributed fairly among its shareholders. There are many reasons why a company feels the need to sell out shares into the market. It could be a need to extend the business and recruit new staff or to introduce a new product in the market. Whatever the reasons for a corporation to go public, the shareholders play a vital role in determining its future market position.
The concept of limited liability is one singular property of stock ownership. This feature implies that in case the company loses out on a lawsuit and arrives at a position wherein it has to pay up a significant judgment, the shareholders will not be affected so drastically. The worst that can happen to the shareholder is the price of the stock becoming valueless. In such cases, creditors do not normally come to seize the personal assets of shareholders. However this market behavior is not always consistent, particularly in case of privately owned companies.
There are mainly two kinds of stocks- common stock and preferred stock.
When we say common stock, we mean the major bulk of stock owned by the public. This category of stock allows the stockholders to vote and the power to acquire dividends. Dividends are part of the profits of a company that are shared by the shareholders and are usually given out on a quarterly basis. It is the common stock that usually determines the mood of the stock market- whenever you read or hear of the market going ‘up’ or ‘down,’ it is always about common stock.
Preferred stock differs from common stock through one significant property- preferred stockholders get higher dividends compared to common stockholders. However as the name suggests, preferred stock does not have too many advantages other than high dividends. Yet there are many investors who are willing to place their confidence on preferred stock for the sake of consistent dividends. If you are planning to go for preferred stock, always make sure to choose reliable companies that are known to generate substantial profits. This will ensure you of a good and constant flow of worthwhile dividends from the company.
Carrie Sommer keeps up with the latest financial news, real time stock market quotes, and economic indicators at http://www.WallStreetSwat.com – an online financial magazine.
Previously, we saw that a central task of sociology is to explore the interplay of society and the individual.
Like any other discipline, sociology also requires a terminology. If we try to trace back the origin of the terms used in the different era, we find wide variations. If for Karl Marx, class and conflict were key concepts to understand society, social solidarity and collective conscience were key terms for Emile Durkheim. Similarly, concepts such as status and role begin with the individual whereas others like social control or stratification begin from a larger context within which individuals are already placed.
An important characteristic of these ideas is that these are required to be modified from time-to-time. As expected, disagreements among the new and already existing concepts occurred. For example, conflict theory versus the fundamentalist theory. But it was inevitable, for society itself is diverse.
SOCIAL GROUPS AND SOCIETY
The comparative and historic perspective of sociology brings home two apparently innocuous facts. The first that in every society whether ancient or feudal or modern, Asian or European or African human groups and collectivities exist. The second that the types of groups and collectivities are different in different societies.
However, it may be noted here that any gathering of people does not necessarily constitute a social group. Aggregates are simply random collections of people who are in the same place at the same time but share no connection with one another. Passengers waiting at a railway station or airport or bus stop or a cinema audience are examples of aggregates. Such aggregates are often termed as quasi groups.
A social group can be said to have at least the following characteristics:
(i) Persistent interaction to provide continuity;
(ii) A stable pattern of these interactions;
(iii) A sense of belonging to identify with other members, i.e. each individual is conscious of the group itself and its own set of rules, rituals and symbols;
(iv) Shared interest;
(v) Acceptance of common norms and values;
(vi) A definable structure.
Thus, a social group can be defined as a collection of continuously interacting persons who share common interest, culture, values and norms within a given society.
TYPES OF GROUPS
PRIMARY AND SECONDARY SOCIAL GROUPS
This categorization is based on the fact that the groups that we belong to may not be of equal importance to our lives. The term primary group is used to refer to a small group of people connected by intimate and face-to-face association and co-operation. The members of this group have a sense of belonging. Family, village and groups of friends are examples of primary groups.
Secondary groups are relatively large in size, maintain formal and impersonal relationships.
The primary groups are person-oriented, whereas the secondary groups are goal-oriented.
Schools, government offices, hospitals, students’ association etc are examples of secondary groups.
COMMUNITY AND SOCIETY OR ASSOCIATION
Community refers to human relationships that are highly personal, intimate and enduring, those where a person’s involvement is considerable if not total, as in the family, with real friends or a close-knit group.
Society or association, on the other hand, is totally different and in fact, opposite of community. The group is apparently impersonal, superficial and transitory relationship of modern urban life. We make contracts or agreements rather than getting to know one another.
We may draw a parallel between the community with the primary group and the association with the secondary group.
IN-GROUPS AND OUT-GROUPS
A sense of belonging marks an in-group. Children belonging to a particular school may form an ‘in-group’ as against those who do not belong to the school.
Non-members of the in-group are generally said to be the out-group. Migrants are often considered as an out-group. But history has it that, out-groups ultimately become in-groups with passage of time.
REFERENCE GROUP
The groups whose life styles are emulated are known as reference groups. In the colonial period, many middle class Indian aspired to behave like proper Englishman. In that sense they could be seen as a reference group for the aspiring section.
PEER GROUPS
This is a kind of primary group, usually formed between individuals who are either of similar age or who are in a common professional group. Peer pressure refers to the social pressure exerted by one’s peers on what one ought to do or not.
SOCIAL STRATIFICATION
Society can be visualized as consisting of ‘strata’ in a hierarchy, with the more favoured at the top and the less privileged near the bottom. In simple words, stratification can be defined as structural inequalities between social groupings of people and can be compared to the geological layering of rock in the earth’s surface.
In general, opportunities for health, longevity, security, educational success, fulfillment in work and political influence are all unequally distributed in systematic ways.
Historically four basic systems of stratification have existed in human societies: slavery, caste, estate and class.
Slavery is an extreme form of inequality in which some individuals are literally owned by others. It has existed sporadically at many times and places, but there two major examples of a system of slavery; ancient Greece and Rome and the southern states of the USA in the 18th and 19th centuries.
Estates characterized feudal Europe.
CASTE
In a class stratification system, an individual’s position is totally ascertained by birth. Suppose, a person is born to a family with lower status attributes, irrespective of his great achievements acquired in the course of his life, will be treated as low caste.
Traditionally, society is divided in terms of the four fold Varna of Brahmins, Kshatriyas, Vaishyas and Shudras. In reality, there are innumerable occupation-based caste groups called jatis.
Even though, constant steps undertaken by the Government and NGOs have considerably curtailed casteism, but still it thrives in various parts of the country.
CLASS
In Marxist theory, social classes are defined by what relation, they have to the means of production. Questions could be asked as to whether groups are owners of means of production such as land or factories? Or whether they are owners of nothing but their own labour?
Weber used the term life-chances, which refers to the rewards and advantages afforded by market capacity. Weber tried to reason inequality with relation to economic conditions.
The functionalist theory of social stratification begins from the general presupposition or belief of functionalism that no society is “classless” or unstratified. The main functional necessity explains the universal presence of social stratification in requirements faced by a society of placing and motivating individuals in the social structure. Functionalism takes into account the functions which are perform to the society. Functionalist sociologists understood society as essentially harmonious and conflict theorists saw society as essentially unequal, unjust and exploitative.
STATUS AND ROLE
A status is simply a position with definite rights and duties that an individual possesses in a society. A role is the dynamic or the behavioural aspect of status.
People acquire different status at various stages of life. A son becomes a father, father becomes a grandfather and then great grandfather and so on. This is called a status sequence.
An ascribed status is a social position, which a person occupies because of birth, or assumes involuntarily. The most common bases for ascribed status are age, caste, race and kinship.
An achieved status refers to a social position that a person occupies voluntarily by personal ability, achievements, virtues and choices. In modern societies, mostly members are accorded prestige on the basis of their achievements, even though ascribed status also matters.
Another term ‘prestige’ is an important effect of status. The prestige of a doctor may be high in comparison to a shopkeeper, even if the doctor may earn less.
Role conflict is the incompatibility among roles corresponding to one or more status. A common example is that of the middle class working woman who has to juggle her role as mother and wife at home and that of a professional at work. Ironically, men also face role conflict in the khasi matrilineal society.
Role stereotyping is a process of reinforcing some specific role for some member of the society. For example, men and women are often socialized in stereotypical roles, as breadwinner and homemaker respectively.
SOCIETY AND SOCIAL CONTROL
Social control refers to the social process, techniques and strategies by which the behaviours of individual or a group are regulated. It refers both the behavior of the individual and groups and also refers to the enforcing of values and patterns for maintaining order in society.
It has been defined differently by functionalist and conflict theorists. Functionalists opined social control as
(i) The use of force to regulate the behavior of the individual and groups
(ii) Enforcing of values and patterns for maintaining order in society.
(iii) It is viewed basically, as necessary stabilizing force.
Conflict theorists usually would see social control more as a mechanism to impose more as mechanism to impose the social control of dominant social classes on the rest of the society. For instance, law can be seen as the formal writ of the powerful and their interests on society.
Society may be informal or formal. Formal social controls are mainly the agencies and mechanisms like law and state. Informal social controls are mostly the personal, unofficial and uncodified ones. They include smiles, making faces, body language frowns, criticism, ridicule, laughter etc.
Social control can also be positive or negative.
A sanction is a mode of reward or punishment that reinforces socially expected forms of behavior. Deviance refers to modes of action which do not conform to the norms or values held by most of the members of a group or society. For example, a woman choosing to become an astronaut may be considered deviant at one time, and be applauded at another time even in the same society.
CONCLUSION
Thus, we get an idea how various terms can facilitate the understanding of society in a systematic and efficient way.
I am a 2nd year student of Electronics and communication Engineering. I am basically from Agartala, Tripura, which is situated in the North-eastern side of India.
The whole concept of interconnection among the factors of money, risk, and time comprise the sphere of finance. The chief catalysts and triggers behind the endowment of money are done by banks, which provide credit. However, today, hedge and mutual funds, private equity and other instruments are increasingly becoming important as similar facilitators. Averting and restricting threats in finance are done by means of impeccable scrutiny and attention to detail while dealing with investments, which are known as financial assets. Securitized versions of these investments can be traded with securities exchanges, through various financial channels. The fundamental idea behind the operations of finance all through the world depends on the fact that any body, unit, or organization that spends less that it earns is capable of loaning or putting up that extra money or asset for further investment. If, conversely, anybody, unit, or organization spends more than it earns, it usually tries to augment its capital asset by taking loans or putting up for sale its assets, in order to reduce its spending and enhancing its earning. The entity which loans money usually has two options, either it can directly buy currency or other assets like bonds from the market, or find some go-between entity like a bank which will take the loan from it. The interest collected for this loan, is much more than the one that the actual lender gets, as the difference goes to the go-between. The major concept of the world of finance works on the basis that a financial instrument like a bank brings together and synchronizes loaning and borrowing functions, of dissimilar proportions sizes, while getting reimbursed with assets for the jobs done. The organization and administration of businesses around the world are centered on the pivotal notion of finance, without proper controlling and plan of which a new business or even an old one might falter. Be it a man or an organization, any entity’s finance is vital for the guarantee of its flourishing prospects. Finance can be of many kinds, the most important of which would be personal and corporate. The concept of personal finance depends on the quantity of money a person or his or her family requires at a particular time and the actual way that they can keep themselves afloat during adverse and unpredicted conditions, related to personal or impersonal exterior situation. The idea behind corporate finance depends on the provision of capital money for an organization’s functions, keeping steady its threats and profits, to augment the company’s income and worth. Some other kinds of finance include public finance that deals with money or funds related to a nation, a town, district, or any other form of political and geographical entity while there is also the concept of experimental finance that tries to institute diverse backdrops or conditions of the financial market in order to monitor under investigational circumstances, and offer a specific view, by means of which financial analysts can examine properly the activities of negotiators and the subsequent nature of particular movement of assets through trading, data dissemination and collection, machinery that fixes costs, and returns procedures. For more information on finance, visit http://financemicroblogging.com and http://financemicroblog.com
