Stock - Page 7

Stock refers to the shares or equity ownership in a corporation. When individuals or entities purchase stock, they are essentially buying a piece of the company, which may entitle them to a portion of the company’s profits, voting rights in company decisions, and, in some cases, dividends. Stocks are typically traded on stock exchanges, where their prices fluctuate based on supply and demand dynamics, company performance, and broader economic factors.There are two main types of stock: common stock and preferred stock. Common stock usually gives shareholders voting rights and the potential for capital appreciation, while preferred stock generally provides fixed dividends and has priority over common stock in the event of liquidation but often lacks voting rights.Investing in stocks can be a way to grow wealth over time, but it also comes with risks, including the potential loss of principal value. Investors often analyze stocks based on various financial metrics and indicators to make informed decisions about buying or selling.