Stock Investing Basics
Start here if you're new to stocks. We'll cover the fundamentals in simple terms—no jargon overload.
What Is a Stock?
A stock (also called equity or share) represents partial ownership in a company. When you buy a stock, you become a shareholder and own a tiny piece of that business. If the company does well (profits grow, products sell), the stock price usually rises — and you can sell your shares later for more than you paid.
Two Main Types of Stock
- Common Stock: Most people buy this. Gives voting rights (usually 1 vote per share) and potential dividends, but you're last in line if the company goes bankrupt.
- Preferred Stock: Higher claim on assets/dividends, usually no voting rights, behaves more like a bond + stock hybrid.
How Do You Make Money from Stocks?
- Capital Gains: Buy low → sell high (most common way).
- Dividends: Some companies pay part of profits to shareholders (quarterly or annually).
- Stock Splits / Bonuses (less common but nice bonus).
Where Are Stocks Bought & Sold?
Through stock exchanges like:
- New York Stock Exchange (NYSE)
- Nasdaq
- Others around the world (Tokyo, London, etc.)
You buy/sell via a brokerage account (Robinhood, Fidelity, Schwab, Vanguard, Interactive Brokers, etc.).