Stock

Definition

A stock (also called equity or a share) represents a unit of ownership in a corporation. When you buy a stock, you become a partial owner (shareholder) of that company and have a claim on part of its assets and earnings. Stocks are traded on exchanges like the NYSE and Nasdaq. There are two main types: common stock (voting rights, variable dividends) and preferred stock (no voting rights, fixed dividends, priority in liquidation). Stock prices are determined by supply and demand, influenced by company performance, economic conditions, and investor sentiment. Historically, the US stock market has returned approximately 10% annually before inflation, making stocks one of the best long-term wealth-building vehicles.