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Common stock


In times of low interest rates for traditional investments, share trading is also becoming increasingly popular in Germany. So-called "common shares" play an important role in this. Common stocks are the most popular type of stock on the German stock market. With this, investors not only acquire company shares, but also a voting right at the general meeting. These shares are also called “tribes” and differ from preference shares due to the included voting rights. Further names for this share class are trunk priority, voting share, common stock or common share. The legal basis for trading in ordinary shares and their structure is set out in Section 12 of the German Stock Corporation Act (AktG). Shareholders are granted voting rights here. The price of a common share can be found on the stock exchange where it is traded. In some cases, ordinary shares will not be issued to shareholders in their original form. Instead, the holder receives a certificate that certifies the ownership of the shares, usually in the case of internationally traded shares. These certificates are treated like shares, but are called, for example, Global Depository Receipt (GDR). In German these certificates are also called "depository receipts". For large institutional investors, it can be quite attractive to have a say in the composition of the company's board of directors and other strategic decisions, such as the distribution of dividends. For this right to vote, it can be worthwhile to accept the monetary disadvantages that arise as a result. Ordinary shares are primarily intended for majority shareholders in order to be able to keep companies moving in a goal-oriented manner.




Of course, investment funds also try to buy as cheaply as possible on the capital market. Because of their sheer size and the resulting influence on the ownership of common stock, they can easily offset this small cost disadvantage. In most cases, your investors will not notice any of this. With the right to vote, the large investment companies can have a say in corporate policy and influence the course of action in their favor. It remains unclear whether this is always the best solution for all investors.

An old stockbroker can lose everything except his experience. (André Kostolany)

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