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What is a Stock: Beginners Guide to Investing

October 15th, 2012

Simple definition of stock = a piece of ownership of a company

  • If you purchase stock in Google, you own a small fraction of Google.
  • When you purchase stock, you're buying a piece of the company.
  • People buy stock in order to invest
  • Companies sell stock in order to gain revenue (money to build/grow the company)

Example

  • A person starts a candy cane company, invests a lot of money, and the company is worth $100,000
  • In order for this company to grow larger, it needs more equipment and employees
  • The company needs more money to get the equipment and employees
  • Instead of going to a bank to borrow the money, stock comes into play
  • The candy cane company sells stock (or pieces of the company)
  • Other people invest in the company and in turn, own part of the company
  • The investors are looking for a financial gain
  • If the company doubles its revenue, the investors also double their money (i.e. if one person invested $30,000 that initial investment is now worth $60,000)
  • The investors benefit as the company grows

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.