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Stock

Stock

A stock is a share in the ownership of a company. Stock represents a claim on the company's assets and earnings. If you continue to buy more stock in a company, your ownership stake in the company becomes greater. Some other names for stock are shares and equity. When you buy stock in a company, you become one of the company’s owners and you are called a shareholder of that company.

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About Stock

As an owner of the company, you are entitled to a share of the company’s earnings. You also will be involved in some voting rights with that company per your stock.

When you purchase stock in a company, you will be issued a stock certificate. This is your proof of your ownership. The importance of being a shareholder is that you are entitled to a portion of the company’s profits and have a claim on their assets. The profits are sometimes paid out in the form of dividends. The more shares you own, the larger the portion of the profits you get. When you own stock, the maximum value of the money that you could lose if the company goes bankrupt is just the amount you invested in the first place.

Shareholders could potentially earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful. There are no guarantees that any stock that you purchase will make you money. When you want to purchase stocks, you will need to do some research and you may want to consult with a stock broker.
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