Category: Stocks

Stocks represent ownership shares in a company. When an individual purchases stock, they are essentially buying a small piece of that company, entitling them to a portion of its assets and earnings. Stocks are typically traded on stock exchanges, and their prices fluctuate based on supply and demand dynamics in the market, influenced by factors such as company performance, investor sentiment, and broader economic indicators.

There are two main types of stocks: common and preferred. Common stock gives shareholders voting rights and a claim on the company’s profits through dividends, while preferred stock typically does not offer voting rights but provides a higher claim on assets and earnings, often in the form of fixed dividends.

Investors buy stocks with the expectation that the value of the company will rise over time, allowing them to benefit from capital appreciation as well as from any dividends paid out. Stocks are a fundamental component of investment portfolios and can provide potential growth, but they also carry risks, including market volatility and the possibility of losing investment capital.