Stocks

Shares, also referred to as stocks or equities, represent ownership stakes in a company. When you purchase shares, you effectively become a shareholder, entitling you to a proportionate claim on the company’s assets and profits. Investing in stocks presents two primary avenues for potential benefits:

1. Capital appreciation: As the company expands and its value increases, the price of its shares typically appreciates, enabling you to sell them later at a profit.
2. Dividends: Some companies allocate a portion of their profits to shareholders in the form of dividends, which can serve as a steady stream of passive income.
3. There are two primary categories of stocks:
4. Common stocks: These confer voting rights to shareholders at company meetings, allowing them to exert influence over the company’s decisions and direction.
5. Preferred stocks: Typically offering a fixed dividend rate, preferred stocks do not grant shareholders voting privileges.

Stocks are traded on stock exchanges such as the New York Stock Exchange (NYSE) and NASDAQ. The price of a stock is determined by the interplay of supply and demand, influenced by factors including the company’s financial performance, prevailing market conditions, and investor sentiment.