STOCKS
Stocks are also referred to as equities because they represent an ownership stake in a company. Companies sell shares typically to gain additional money to grow the company. This is called the initial public offering (IPO). After the IPO, stockholders can resell shares on the stock market.
When you invest in stock, you buy ownership shares in a company—also known as equity shares. Your return on investment, or what you get back in relation to what you put in, depends on the success or failure of that company. If the company does well and makes money from the products or services it sells, its stock price is likely to reflect that success.
How to Invest in Stocks
Investing is a time-tested way of putting your money to work for you, as you work to earn more of it. Legendary investor Warren Buffett defined investing as “forgoing consumption now in order to have the ability to consume more at a later date.
By investing your money regularly, you may be able to increase it many times over with time. That's why it's important to begin investing as early as possible and as soon as you have some money saved for that purpose. Furthermore, the stock market is a good place to start.
- Investing is the act of committing money or capital to an endeavor with the expectation of obtaining additional income or profit.
- Unlike consuming, investing puts money to work so it can grow over time.
- However, investing also comes with the risk of losses.
- Stocks is a common way for investors, no matter their experience, to invest for a lifetime.
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