What is a Stock?
A is a share of ownership in a company. When a company wants to raise money, it can divide itself into millions of small pieces and sell them to the public. Each piece is a . When you buy one, you become a part-owner of that business.
What does owning a mean?
It means you own a tiny slice of everything that company has. Its buildings, its products, its brand, its future . If the company grows and becomes more valuable, your becomes more valuable too. If it struggles, your loses value.
You do not get a say in day-to-day operations, but as a you do have certain rights, including the right to vote on major company decisions and the right to receive if the company pays them.
How do you make money from a ?
There are two ways. The first is price appreciation. You buy a at one price and sell it later at a higher price. The difference is your profit.
The second is . Some companies share a portion of their profits with on a regular basis. Not all companies pay , many reinvest their profits back into growth instead.
What is the risk?
are not guaranteed. A company can perform poorly, face competition, or even go . If that happens, your investment can lose value or disappear entirely. This is why understanding what you own, and why matters.
Why do people invest in ?
Over long periods of time, have historically outperformed most other types of investments. Owning a diversified collection of has been one of the most reliable ways for ordinary people to build wealth over decades.