Stocks

Stocks are a type of security that represent ownership in a company. Companies issue stocks to raise money to finance their operations and to expand their businesses. Investing in stocks means that you are buying a piece of the company and you own a share of the profits and losses. For example, if you buy 1 share of Apple stock, you own a tiny piece of the company. If Apple’s stock price rises, then your investment will increase in value. On the other hand, if the stock price drops, then your investment will decrease in value. An analogy that can help you understand stocks is to think of it like a cake. The company is the baker, and the shareholders are the people who get to share the cake. The bigger the slice you own, the more of the profits you get to share. A fun fact about stocks is that the oldest stock still in existence is the Dutch East India Company, which was founded in 1602!