In this new series, we get to the crux of investing definitions.
Previously, we looked at what the stock market is all about. Now, let’s tackle the term “stocks”.
So, what is a stock?
A stock is a type of investment available on the stock market that gives you part ownership of a listed company.
For example, if you have 1,000 stocks in Company XYZ and the company’s total number of stocks available in the stock market is 1,000,000, you own 0.1% of Company XYZ.
You may have also come across the term “shares” or “equities”. They all mean the same thing; stocks, shares and equities can be used interchangeably.
When you own shares in a company, you are called a shareholder because you have a share in the company’s profits and dividends.
Shares can be further broken down into:
Ordinary shares; and Preference shares.Ordinary
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