Stocks

Frequently Asked Questions

• What is a stock?

  A stock is a share in a company and means a part of the company's assets and money. There are two kinds of stock: common and preferred. Common stock lets the owner vote and get money, while preferred stock doesn't allow voting but has a better claim on assets and money.

• How do I buy stocks?

  You can get shares using a broker, online or traditional. First, open an account and deposit money. Then, buy the shares you want. Online brokers provide tools to help with investing.

• What factors should I consider before investing in a stock?

  Before buying a stock, think about the company’s money situation, leaders, competition, industry trends, and how much it can grow. Also, check the stock’s valuation numbers like P/E ratio, EPS, and dividend yield. It’s also key to know how much risk you're okay with and why you're investing.

• What is the difference between a stock and a bond?

  Stock is a part of the shares of a company that give you profit and can sometimes be paid in cash. Bonds, on the other hand, are a form of debt. When you buy a bond, you make a loan to the issuer (government or corporation) and sometimes you get the interest back and the bond matures. Stocks can be risky but can offer higher returns than bonds.

• How are stock prices determined?

  Stock prices depend on how much people are willing to buy and sell in the market. Many factors affect this such as how the company is doing financially, how people feel about investing, how the business is doing, and how the economy is doing in general. If more people want to buy stock the price will increase But when there are more people selling than buying, the price goes down.

• What is a Stock Exchange?

  A stock is a place where people buy and sell stocks. Larger stocks include the New York Stock Exchange and the Nasdaq. Stock positions help people sell stocks and ensure there is enough liquidity and loyalty in the market.