Stocks

A stock is a type of security that signifies ownership in a company. When you purchase a stock, you buy a share of the company’s equity, meaning you own a portion of that company. Stocks are bought and sold on stock exchanges, and their value can fluctuate based on the company's performance and market conditions.

Stocks represent ownership in a company. When a company needs capital, it can issue shares to the public through an Initial Public Offering (IPO). Investors purchase these shares, giving the company capital to grow or expand. In return, investors become shareholders and have the potential to earn dividends and benefit from stock price appreciation. Company performance, economic conditions, and market sentiment influence stock prices.

There are two main types of stocks:

• Common Stock: Common stockholders have voting rights in corporate decisions and may
  receive dividends. The value of common stock can fluctuate widely, and holders are last in line
  to receive assets if the company goes bankrupt.
• Preferred Stock: Preferred stockholders generally do not have voting rights but have a higher
  claim on assets and dividends than common stockholders. Dividends on preferred stocks are
  often fixed and paid before dividends on common stocks.

To buy stocks, follow these steps:

1. Open a Brokerage Account: Choose a brokerage firm and open an account. Many online brokers
   offer easy access to stock trading.
2. Research Stocks: Conduct research to identify stocks that fit your investment goals and risk
   tolerance. Consider factors such as company performance, industry trends, and financial health.
3. Place an Order: Once you've chosen a stock, place an order through your brokerage account.
   You can place different orders, such as market orders (buy or sell at the current market price) or
   limit orders (buy or sell at a specified price).

Dividends are payments made by a company to its shareholders from its profits. They are typically paid quarterly and can provide a steady income stream for investors. Not all companies pay dividends; some prefer to reinvest earnings into the business for growth.

Stock market volatility refers to the variation in stock prices over time. High volatility means that stock prices fluctuate significantly, leading to greater investment risk and potential rewards. Factors contributing to volatility include economic events, company news, and overall market sentiment.