Financial Assets
Written by Brian Sov. — June 14, 2026
Understanding the building blocks of financial markets is essential for every investor. From stocks and bonds to options and futures, each asset class plays a unique role in portfolio construction, risk management, and wealth creation.
Explore Asset Classes
Click on any asset type below to reveal its definition, purpose, subtypes, and related topics.
A stock (also known as equity) is a security that represents fractional ownership in a corporation. When you buy a stock, you own a piece of that company proportional to the number of shares you hold.
Companies issue stocks to raise capital for growth, research, operations, and expansion without taking on debt. Investors buy stocks to build wealth through price appreciation, dividend income, and to participate in the growth of businesses they believe in.
Types of Stocks
The most prevalent type of stock. Common shareholders have voting rights (typically one vote per share) in corporate decisions like electing the board of directors. They may receive dividends but are last in line to receive assets if the company goes bankrupt.
- Voting rights in corporate elections
- Variable dividend payments
- Higher potential returns than preferred stock
- Last in line during liquidation
Preferred shareholders have a higher claim on assets and earnings than common shareholders. They receive fixed dividend payments before any dividends are paid to common shareholders, but generally do not have voting rights.
- Fixed dividend payments
- Priority over common stock for dividends
- Priority over common stock in liquidation
- Usually no voting rights
- May be callable (company can buy back at a set price)