What are Stocks?
Stocks, also known as shares or equities, represent ownership in a company. When you buy a stock, you are purchasing a small piece of that company’s ownership. Companies issue stocks to raise capital for growth and expansion.
Types of Stocks
- Common Stocks: Offer voting rights and dividends.
- Preferred Stocks: Pay fixed dividends but no voting rights.
How Stocks Work
Stock prices fluctuate based on supply and demand in the market. Investing in stocks can lead to capital gains (profits) if the stock price increases.
Benefits of Stocks
- Potential for high returns.
- Ownership in a company.
- Dividend income.
Case Study: Apple Inc.
Apple’s stock (AAPL) has shown consistent growth over the years, making it a popular choice for investors. In 2020, AAPL’s stock price increased by over 80%, rewarding investors with significant returns.
Statistics
According to a study, the average annual return on stocks is around 7% after adjusting for inflation. This makes stocks a lucrative investment option for long-term growth.
