Stocks

Stocks are financial instruments that represent ownership in a company. When an individual purchases stock, they acquire a share of the company’s equity, which entitles them to a portion of the company’s profits, typically in the form of dividends, and gives them voting rights in certain corporate matters. Stocks are bought and sold on stock exchanges, and their prices fluctuate based on supply and demand dynamics, as well as the company’s performance and broader economic conditions. There are two main types of stocks: common stocks, which usually provide voting rights but variable dividends, and preferred stocks, which generally offer fixed dividends and have priority over common stocks in the event of liquidation. Investors buy stocks with the expectation that the value will increase over time, allowing them to sell at a profit. Stocks are considered a key component of investment portfolios, providing opportunities for capital appreciation and income generation.