Stock Market Basics

Stocks represent ownership shares in a company. When you buy a stock, you become a partial owner of that company and have a claim on its assets and earnings. Key Points: • Stocks are also called shares or equity • They represent fractional ownership in a company • Stock prices fluctuate based on supply and demand • Shareholders may receive dividends as profit sharing Types of Stocks: • Common Stocks - Voting rights, variable dividends • Preferred Stocks - Fixed dividends, no voting rights • Growth Stocks - High growth potential, low dividends • Value Stocks - Undervalued, stable dividends Stock Ownership Benefits: • Capital appreciation potential • Dividend income • Voting rights in company decisions • Liquidity - can be sold anytime during market hours