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What are stocks?

In simplest terms, stocks are an investment within a company. The stock of a company is made up of all the shares from which the ownership is divided between shareholders. Investors can buy and sell shares of a particular company to speculate in the price fluctuation of the stock. A single share of the stock represents fractional ownership of the corporation in proportion to the total number of shares. A person that holds shares of stocks is called a shareholder. The total value of a companies issued stocks is known as market capitalisation. The price of a share can change depending on economic factors, company performance and investor sentiment. When a company goes public and offers its stock for the first time, this is referred to as an initial public offering (IPO). Companies will often sell shares in their business in order to raise capital for growth, expansion or to clear debt. Any company profits can be shared between stockholders through the issuing of a dividend or they can use profits to reinvest. Stocks that frequently issue dividends are called income stocks whereas companies who reinvest profits are called growth stocks. Some of the most popular stocks trade online include Adidas, Apple, Amazon, Facebook, Google, Nike, Netflix, NVIDIA, Tesla, Vodafone, Uber, Walt Disney, etc.

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