Every day, millions of people trade stock in markets around the world. But what does it actually mean to own stock? For many, it simply represents a dream of financial gain. But stocks are much more than investments. They allow companies to expand business overseas, build new buildings, create more jobs, offer better pay and conduct life-saving research.
By learning about this complex system, you can begin to understand the importance stocks play in our economy. And you can make more informed decisions about your own investment portfolio.
What is stock?
Stock signifies ownership in a corporation. Many companies issue stock, also known as equity, to raise money for expansion, equipment upgrades or other costly developments.
By purchasing stock, you are actually paying for a small percentage of everything the company owns. Generally, investors purchase stock to realize capital gains.