Stocks

Stocks are financial instruments that represent ownership in a company. When an individual purchases stocks, they gain a share of that company’s assets and earnings. Stocks are typically issued by companies to raise capital for various purposes, such as expansion or debt repayment. There are two main types of stocks: common and preferred. Common stockholders have voting rights and may receive dividends, which are a portion of the company’s profits distributed to shareholders. Preferred stockholders generally have a higher claim on assets and earnings but usually do not have voting rights.

Stocks are traded on exchanges, such as the New York Stock Exchange or Nasdaq, and their prices fluctuate based on supply and demand, investor sentiment, and the company’s performance. Investing in stocks can offer the potential for capital appreciation and dividend income, but it also carries risks, including market volatility and the possibility of losing principal. Overall, stocks are a fundamental component of the equity market and a primary way for individuals and institutions to invest in businesses and gain exposure to economic growth.