What Is a Stock?
Plain English
A stock is a small ownership slice of a company. If the company does well, your slice can become more valuable; if it does poorly, it can become less valuable.
What is it?
A share of stock represents partial ownership in a corporation, entitling the holder to a proportional claim on assets and earnings, and often voting rights.
Why does it matter?
Stock ownership is one of the primary ways individuals participate in the growth of businesses and the broader economy over time.
How does it work?
Stocks are bought and sold on exchanges; prices move based on supply, demand, and expectations about a company's future earnings.
Risks and limitations
Stock prices can decline, sometimes significantly and without warning. A stock's value depends on the underlying business's performance and broader market conditions, neither of which are guaranteed.
Questions to ask a professional
How does this fit into my overall diversification? What are the fees involved in buying and holding this?