Stocks - Page 126

Stocks represent ownership shares in a company. When an individual purchases stock, they are buying a small piece of the company, which entitles them to a portion of its profits and assets. Stocks are traded on stock exchanges, allowing investors to buy and sell their shares. The value of stocks can fluctuate based on the company's performance, market conditions, and investor sentiment. There are two main types of stocks: common stocks, which typically give shareholders voting rights and dividends, and preferred stocks, which usually provide fixed dividends and have priority over common stocks in asset liquidation. Investing in stocks can yield returns through capital appreciation and dividend payments, making them a key component of many investment portfolios.