What Are Stocks?

Updated: Mar 25, 2021

The term Stocks or shares of a stock comes from the publication of companies, it is the ownership of a certain amount of a public corporation. When a private corporation goes public, they tend to sell a portion of the company's shares at a certain amount per share.



One of the purposes of this action is to increase its capital, and get more cash to operate its business. The value of each of these stocks increases when the amount of money the investors are willing to pay for each share increases, and vice versa.


Basically, more people purchase a stock, it's price will go up. When more people are selling than buying, it's value will go down.


To sum it up, buying a stock from a corporation is no different than buying a piece of gold nugget from the jewelry store and expect the price of gold to go up. If the price did get higher, and we sell it back to the market. The profit is the price difference between buy and sell point.





For example: The stock of 1 share of Amazon was $3,000 when I purchased it, and 1 month later, it is $3,200. If I decided to sell it now, I would get $3,200. My profit is $200.

The difference between a piece of commodity and a share of stock is that stocks are actually much easier to buy and sell. With modern technology, we can buy and sell stocks at a push of a button on your mobile phone.


People buy stocks for various reasons. Some buy it for capital appreciation, some want the ability to attend board meetings, and some buy it for dividend. Many people believe stocks are a way to make a fortune, and secure a retirement; however, I also believe it is a great way to lose a ton of money, and get into large amounts of debt.


What are publicly traded companies?


They're basically the top companies of a nation or society. Usually consist of a great deal of great managers and specialists who operates the company. Publicly traded companies usually went through fierce competition to get to where they are.


To sum it up, publicly traded company are "mostly" excellent company operated by excellent people.


When we invest in great companies like these, we often rewarded with great fortunes.


There are many forms of stocks that represent different types of companies.


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