PLAN ON TAKING THE SIE EXAM? STUDY DIFFERENT TYPES OF COMMON STOCK FOR THE TEST!

 If you plan to sit for the  SIE Exam, be sure that you know examples of different types of common stock, such as shares looking for income, defensive shares, defense shares, growth shares. And make sure that you know examples of each type.

For example, lets talk about defensive stock. The term defensive means stock of a company in a industry that does well in both good economic times as well as in economic downturns. Good examples of defensive industries are tobacco companies, supermarkets, liquor and beer manufacturers, and cosmetics. Even in recessions and depressions, earnings of these companies or industries do not change very much.

Defensive does not refer to defense stocks. Defense stocks are stocks of companies like General Dynamics, Boeing, Lockheed Martin, and Northrup Grumman. These companies manufacture instruments of war. Defense stocks depend on countries wishing to wage war or defend their national territories. No war, then sales of armaments go down. Lots of wars, sales go up.

Stocks looking for capital appreciation aim to increase the price of their shares in the market place. These companies care little about paying dividends. Instead they hold on to cash that other companies would pay out in dividends, and utilize the savings by investing in more machines, more factories, more innovations. Good examples of companies aiming for capital appreciation are newly formed companies in the tech industries.

Income stocks on the other hand have a history of paying cash dividends to  their shareholders, normally every three months, or four times per year. These companies are usually seasoned companies, having been in business for years and attracting shareholders by paying a regular cash dividend.


Here is the link to FINRA's Content Outline for the SIE Exam. Bob Eder's Study for the SIE Exam closely follows FINRA's Content Outline so that you don't waste time in studying material not required by the SIE Exam.

Bob Eder in his Study for the Securities Industry Essentials (SIE) Exam devotes Chapter 3 to Equity Securities such as Common Stock. 

Study for the Securities Industry Essentials (SIE) Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's book on Amazon.

For questions about Bob Eder's Study for the Securities Industry Essentials (SIE) Exam, or questions in general about Common Stock, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. 

See Bob Eder's Author Page on Amazon.com.

P.S. Please consider posting a written review of Bob Eder's Study for the SIE Exam on Amazon and/or Goodreads. We value your opinion!

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