Stocks

Stocks are financial instruments that represent ownership shares in a company. When an individual purchases stock, they acquire a claim on a portion of the company's assets and earnings, which can provide the potential for appreciation in value and dividends. Stocks are typically traded on stock exchanges, and their prices fluctuate based on supply and demand dynamics, company performance, and broader economic conditions. There are two main types of stocks: common stocks, which usually give shareholders voting rights and the potential for dividends, and preferred stocks, which typically offer fixed dividends and have priority over common stocks in asset liquidation but often do not confer voting rights. Stocks are a vital component of investment portfolios as they can contribute to capital growth and serve as a hedge against inflation.