HomeBusinessWise Investments: What Is a Stock Certificate and Do You Need One?
Wise Investments: What Is a Stock Certificate and Do You Need One?
September 25, 2020
If you’re interested in beginning to buy stocks, you’ve probably wondered “What is a stock certificate?” Are these official pieces of paper necessary?
What was once a common piece of paper is now in the past. The stock certificate was once your way of showing that you had money in a company, but is now a thing of imagination in the age of digital everything.
But what is a stock certificate and what happened to them?
Here is everything you need to know about the physical stock certificate.
What Is a Stock Certificate?
A stock certificate was an actual piece of paper that certified ownership in a companies stock. It contained everything from the date purchased to the number of stocks that the person owned.
These certificates were closer to a diploma in terms of size and were often touted as such. Stock certificates were proof that you were investing in some shape or form. The bigger size also made it harder to counterfeit, since stocks were somewhat seen as a form of currency.
How Are They Different from Stock Ownership Today?
Today, many stocks are digital and kept on individual brokerage servers. These servers are what are used to assign a digital signature to your stock.
Each person has their own digital signature, which typically is a set identification number, that is then labeled onto a set number of shares. These stocks of course are all digital, meaning the data itself is the certificate, rather than the piece of paper.
The certificates of olden times also had interesting designs that reflected the company that issued them. For instance, Disney would put their characters onto their stock certificates as a way for them to be cherished more.
Because of their digital components, trading stocks is now much easier compared to when you had to have the stock certificate in hand to sell it. This means you can simply press a button online and have the brokerage account sell or buy your share.
If you have lost a stock certificate, this article can tell you how to get a new one: check it out!
Fun Stock Certificate Facts
Paper stocks are somewhat still around, despite their lack of usefulness. When you buy into a company, be sure to look into seeing if they still have paper stock certificates, even if it is just a novelty.
During the Great Crash of 1929, people who had stock certificates from now-closed businesses would use these pieces of paper as wallpaper. This was a way to remember what once was, and still get some worth out of a worthless piece of paper.
The Stock Certificate Is Still Around, Just In a Different Way
So what is a stock certificate? A stock certificate nowadays is just a novelty item that once represented a person’s ownership of stock in a company. While many companies have gone digital, it may still be worth it to reach out and see if they have them available.
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