A stock is an instrument of investment that used to describe ownership through shares in the company. A share of stock represents ownership of the Company in proportion to the total number of shares.
An investor invests money in the stock market to buy stocks and the investor thinks that the value of the stock will go up over time. Issuing shares to the investors is a method by the company to raise money to grow and expand their business.
The holders of the shares are known as shareholders of the Company and the ownership of the shareholder is based on their proportion of holdings of the Company.
The stock prices have been fluctuating the whole day, but the investors who own stock over time in the hope that the value of the stock will be increased at the end of the day.
In a few circumstances, the Companies can lose the value of the shares and the stock investors may lose all or part of their investment. That’s why investors need to spread their money around, buying stock in many different companies rather than focusing on just one company. But there are some benefits or rewards to the investors by investing in stock markets as capital appreciation, dividends and ability to vote shares and influence the company.
Stocks carry more risk than other investments, but also have the potential to higher rewards. In general, the stock has its simple formula, i.e. No gain without taking risks.