Glossary entry for Stocks:
Stocks
Short definition: Stocks, also known as shares or equities, represent ownership in a corporation.
Explanation: When you purchase a stock, you become a shareholder and own a portion of the company. This ownership entitles you to a share of the company’s profits (through dividends) and a potential increase in the value of your investment if the company performs well.
Example: If you buy 100 shares of Apple stock, you own a small fraction of Apple Inc. and are entitled to a portion of its profits and any increase in the stock price.
Additional information (optional): There are two main types of stocks: common stock and preferred stock. Common stockholders have voting rights and may receive dividends, while preferred stockholders have a higher claim on the company’s assets and earnings but typically do not have voting rights.
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