Finance Friday is where we take a quick look at one financial term. Very often we see and hear a lot of money jargon and may not really know what it all means. I’ll pick one term each week and we can all learn together 🙂
This Finance Friday we are looking at Stocks.
A Stock simply represents ownership of a piece of a company. An organization sells stock in their company, in order to raise funds to operate their business. Each unit of stock is called a Share – hence the term Shareholder being used to describe the owner of the stock.
Stocks are generally bought and sold on Stock Exchanges, and are available for investors to purchase through stockbrokers. Each Stock Exchange (New York, London, Tokyo etc) lists the companies that are selling stock, along with the price of each. An investor can buy full stocks or just part of a stock.
There are a number of factors that will cause the price of a stock to rise or fall – the success of the company, economy health, world events and investor predictions; to name a few. Investors make money by selling stocks at a higher price than they paid for them.