What is Stock? Lamens Terms Only!?

Question

How does it work? Should I invest in stock? What are bonds? Where is a good place to start?
Lamens Terms Only Please!

Answer 1

If you own stock in a company, you own a small portion of the company. If they make money, the value of your stock may increase on the market because people will want to buy it from you hoping that it will increase even more. Some stocks have dividends, which means that at a certain time or level, the company will payout the surplus money to the stock holders. Stock is the general term. A share is the smallest unit of ownership in that company. Your stock in a company may comprise any number of shares. When you own stock, you have the right to help run the company via the board of directors and open votes.

A bond is a little different. It is not ownership of a group but a loan to that group. You are obligated to let them have the loan for a fixed amount if time (at least a year to as long as 30 years or more). If you take your money out early, you will lose some of it as a penalty for breaking a promise. If you leave it in long enough they will pay you back the total amount plus interest. You have no right to the running of the group. Governments tend to issue bonds.

Answer 2

In financial terminology, stock is the capital raised by a corporation, through the issuance and distribution of shares. A shareholder is any person or organization which holds shares, or fractions of shares, of a corporation's stock. The aggregate value of a corporation's issued shares is its market capitalization.

Bonds, on the other hand, are debt issued by certain borrowers who promise to pay you a certain amount of interest rate over the period of the bond. The risk of the bond is dependent on the ability of the debtor to pay you.

If you are willing to take a certain amount of risk in your investment, then stocks are a good choice for the long-run.

You could start by calling your broker. If you do not have one, you can open an account with a broker first.

Answer 3

As an amateur I suggest you look at mutual funds as that spreads your risk of loss over a lot of stocks rather than focusing in a few stocks. The cost are lower and if you are employed, you can set up an IRA to invest your money either in tax free now but taxed later or Roth IRA that is taxed now as ordinary income but the growth is tax free when you draw it out at a certain age, I think 65.

Answer 4

Geeezz... I guess you'll have to talk with Lamens when he gets back in the office a little later...

Answer 5

stock is shares like you can say your share in any company, whose shares you have if any
if company's goodwill increases value of shares increses in market