Stocks - Page 4

Stocks refer to shares representing ownership in a company. When individuals purchase stocks, they acquire a claim on the company's assets and earnings. Stocks can be bought and sold on stock exchanges, and their prices fluctuate based on supply and demand, as well as the company’s performance and market conditions. Investors typically buy stocks to gain capital appreciation (increase in stock value) or to receive dividends (a portion of the company's profits distributed to shareholders). Stocks can be classified into various categories, including common stocks, which confer voting rights and potential dividends, and preferred stocks, which generally provide fixed dividends and have priority over common stocks in the event of liquidation. Investing in stocks can be a means of participating in the economic growth of a company, but it also carries risks, as stock values can decline, leading to potential financial losses for investors.