As discussed in the Introduction who acts as an agent to assist people in the buying and selling of shares, mutual funds, etc. He also provides advice to the customer if required.

The stock broker charges commission on every transaction he conducts and might take counseling fees as well. We shall now have a look at the services rendered by the stock broker.

a) Shares

Shares are officially known as stocks and thus the term stock market has come up. A share can be defined as one portion of an equal number of portions in the total capital of a company or an organization.

Having a share warrants the owner to some proportion of the non-reinvested, distributed profits (commonly known as dividends). In case of liquidation, the share holder also has a right to his portion of the price of the company.

Shares can be both voting or non-voting in nature. If the shares are voting then the share owner can cast his vote on the board of directors as well as the corporate policy of the organization. If they are non-voting a share holder doesn’t have such liberties. There are different types of shares like preference shares, equity shares, dual class shares, treasury shares etc.

b) Debentures

A debenture can be said to be a long-term debt tool which is used by large organizations or governments in an attempt to secure funds. Debentures are very similar to bonds, only there is a difference in the securitization conditions.

A debenture is mostly unsecured i.e. there are no pledges on assets in case of failure to repay the amount invested. However, they are secured by all the properties which are not pledged. In case an institution is to go bankrupt, the debenture holders fall in the category of general creditors.

Debentures provide benefits to both the issuer and the holder. For the issuer they raise his liquidity and enable him to invest in new ventures and for the holder he is guaranteed higher returns in case of a successful establishment.

Many a times, debentures for financing the construction of leisure outlets and sports complexes, in such cases instead of a rate of interest the organizations offer benefits like lifetime memberships, discounted tickets, preferential treatment etc.

c) Mutual Funds

Mutual Funds are a form of collective investment. They pool in money from many different investors and invest it in bonds, stocks, government securities etc. The value of the share in a mutual fund is calculated by dividing the total funds available by the number of shares which are issued or are outstanding.

As the money of a large number of investors is invested simultaneously it is usually done so in low risk stocks. As a result, a higher return on your investment is highly likely. However, at the same time investments in mutual funds won't make you a millionaire overnight.

These are the three basic types of investments which one can consider. Securities are also another common form of investment but they are not normally referred to brokers. Let us also have a look at famous international stock broking firms:

• Merrill Lynch & Co. Inc.
• AIG
• Goldman Sachs
• PaineWebber Group Inc.
• Morgan Stanley