Ever dreamed of owning a big company one day? Well, you’re not alone, but what if I told you that with just a bit of change, you can be a co-owner of the largest companies in the world right now. That’s right, if you invest just a bit of money, you have the opportunity to own equity in companies across virtually all industries with different sizes, focuses, and more. By buying into these companies, one hopes to make a return on their investment for their financial benefit. These buy-in opportunities are called stocks, one of the most common forms of investing, and today, I am going to teach you all about stocks, what they are, and how they grow.

To start, let’s establish what exactly a stock is. A stock is an indicator of ownership within  a company, and, as previously mentioned, when you buy a stock you become a co-owner of the particular company. By buying a stock, one hopes to make a profit by giving companies capital for growth, research and development, or other business needs in exchange for equity within the company that can increase or decrease due to a variety of factors that we will get into shortly. Investors can receive returns by selling their number of shares for a higher price than what they bought them at, along with dividends, which are a distribution of profits given out by some companies. 

Now you may be wondering, what exactly makes a stock go up or down? Well, there are a number of factors, including the performance of the company (how well their profit and revenue growth is), the confidence of fellow investors about the performance of the company (directly playing into the idea of supply and demand of the stock, with a higher demand driving up the price of shares), interest rates (see interest rates article for more information), and industrial trends. Stocks also have a tendency to fluctuate in the short term, which are mainly due to economic reports, geopolitical events, and investor behavior.

All in all, stocks are a great opportunity for people of all ages to invest their money in, and with sufficient financial literacy and experience, one can surely make a sizable profit. However, stocks do come with a risk, so it is important to remember to do your research on companies you’re investing in and keep a diverse portfolio of companies across different industries.