What is a Stock: Beginners Guide to Investing

What exactly is a stock?

-If you purchase stock in Google, you own a small fraction of Google.
-When you purchase stock, you're buying a piece of the company.
-People buy stock in order to invest
-Companies sell stock in order to gain revenue (money to build/grow the company)

Example
-A person starts a candy cane company, invests a lot of money, and the company is worth $100,000
-In order for this company to grow larger, it needs more equipment and employees
-The company needs more money to get the equipment and employees
-Instead of going to a bank to borrow the money, stock comes into play
-The candy cane company sells stock (or pieces of the company)
-Other people invest in the company and in turn, own part of the company
-The investors are looking for a financial gain
-If the company doubles its revenue, the investors also double their money (i.e. if one person     invested $30,000 that initial investment is now worth $60,000)
-The investors benefit as the company grows

#stockdefinition #stockbasics #stocktrading #stockbeginners

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• #education
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