What Are Stocks?

Investing in stocks can be one of the most effective ways to grow your wealth over time. While stocks can be volatile in the short term, in the long run they tend to provide much higher returns than other assets such as government bonds and cash savings.

Interested in learning more about stocks and how to invest in them?

This guide to investing in stocks is a great place to start.

In this guide, we’ll walk you through the basics of stock investing and explain how you can invest in stocks through BeginnerTalk.

What is Stocks?

Stocks, or shares as they are often called, are investments that represent ownership in a company.

Companies issue stocks in order to raise money so that they can grow and develop. When you buy a stock, you essentially become a part-owner of the underlying company and are entitled to a share of its profits.

Stocks are traded on stock exchanges such as the New York Stock Exchange (NYSE), the NASDAQ, the London Stock Exchange (LSE), and the Australian Securities Exchange (ASX).

A stock exchange acts like a market where buyers of stocks can connect with sellers. To place a trade, you need an investment account with a stock broker or investment platform.