Stock FAQs

Accountants in Westchester NY here at Herman and Company CPA’s have all the answers to your personal finance questions! Stock trading can be a tremendous way to grow your finances if approached with the correct research and are carefully monitored.

stock trading tips from scarsdale accountant paul hermanThe following are FAQs our Westchester accounting firm regularly receives regarding stock trading and how it works. 
▼ How does stock trading work?

Stocks are traded in quantities of 100 shares, called round lots. Any quantity of stock under 100 shares will be considered an odd lot.

▼ What is the difference between Preferred and Common Stock?

Most stocks are common stocks. However, there is another type (known as preferred) which gives certain advantages regarding dividends. Generally, preferred stock holders do not have the same voting rights that the holders of common shares do. Common stocks are based on company performance, while preferred stocks will usually have a stated dividend.

▼ How can I invest in foreign stocks?

It is fairly easy to invest in foreign corporations, because these corporations need to register these securities with the SEC. These companies are subjected to the same rules as U.S. companies.

How are stock prices determined?

A stock’s prices are a result of trading on stock exchanges, and prices rise and fall based on the supply and demand of the stock.

What are common and preferred stocks?

Common stock is piece of corporate ownership. Those who hold common stock share profits from the corporation as dividends, and also have voting rights. This means that common stock holders benefit financially if a company succeeds, but also means they lose money if a company does not. Those who hold preferred stock in a company have an unchanged dividend amount of stock in a company, and often do not have voting rights. Over a period of time, companies often increase their common stock dividend.

 How can I be a successful stock trader?

Determine your goals and do your homework. Get to know the industry and companies you’re investing in, and keep up with the latest news and trends. Make sure you know when to cut your losses, and focus on making small and steady short-term profits.

Our Scarsdale tax preparers here at Herman & Company CPA’s are here for all your financial needs. Please contact us if you have questions about these provisions or any other tax compliance/planning issues, and to receive your free personal finance consultation!

Herman and Company CPA’s proudly serves Bedford NY, Bedford Hills NY, Chappaqua NY, Larchmont NY, Rye Brook NY, Purchase NY, Bronxville NY, White Plains NY, Stamford CT and beyond.

Photo Credit:  David Paul Ohmer via Photopin cc

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Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.