Stocks are usually categorized by company size, industry, geographic location, and style.
A growth stock — is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market.
A blue-chip stock — These are typically large, well-established, and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors.
Penny stocks — are those that trade at a very low price, have very low market capitalization, are mostly illiquid, and are usually listed on a smaller exchange. These stocks are very speculative and are considered highly risky because of lack of liquidity, a smaller number of shareholders, large bid-ask spreads, and limited disclosure of information.
Dividend stocks — Dividend stocks are usually well-established companies with a track record of distributing earnings back to shareholders.
A defensive stock — is a stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market.
A cyclical stock — is a stock that the price is affected by macroeconomic or systematic changes in the overall economy.
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