Stock

A stock (also called a share or equity) represents fractional ownership of a company. When a company issues stock, it divides ownership into millions of shares and sells them to raise capital. As a shareholder, you own a proportional claim on the company's assets and earnings.

Stock prices fluctuate continuously based on investor expectations about the company's future earnings, broader economic conditions, interest rates, and market sentiment. Over long periods, stocks as an asset class have historically delivered higher returns than bonds or cash, compensating investors for accepting greater short-term volatility.

Common stockholders may receive dividends and have voting rights on major corporate decisions. Preferred stockholders generally receive a fixed dividend and have priority over common stockholders if the company is liquidated, but typically lack voting rights.