Stocks
a.k.a. Shares, Equities
Shares of ownership in a company. Owning a stock means owning a small slice of that business.
A stock (or share) is a piece of a company. Buy one and you own a tiny part of its future profits, and its future problems.
Stock prices move on earnings, growth, competition and the mood of the whole market. Some companies also pay part of their profits to shareholders as dividends. Like any market, stocks can be traded long or short, and with leverage the swings get sharper.
Owning a slice
- Buy 10 shares at $50: 10 × $50 = $500.
- The price rises to $55: 10 × $55 = $550.
- Gain: $50, or 10%.
Bottom line: A $5 move per share is a $50 gain on ten shares.
Buying a company because its product is popular, without looking at whether the price already reflects that.
Keep this word for good
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