Stocks

Stocks represent ownership shares in a corporation. When an individual buys stocks, they are purchasing a piece of that company, which may entitle them to a portion of the company’s profits and assets. Stocks are typically classified into two main categories: common stocks and preferred stocks.Common stocks usually give shareholders voting rights, allowing them to participate in corporate decisions, while preferred stocks generally provide dividends before common stocks and have a higher claim on assets in the event of liquidation but usually do not grant voting rights.Stocks are traded on stock exchanges, where their prices fluctuate based on supply and demand, as well as overall market conditions and company performance. Investors buy stocks to earn returns, either through capital appreciation – an increase in the stock's price – or through dividends – regular payments made to shareholders out of a company’s profits.Investing in stocks can involve risks and requires understanding of market dynamics, as stock values can vary widely. Overall, stocks are a primary instrument for raising capital for companies and providing investment opportunities for individuals and institutional investors.