“A stock is a share in the ownership of a company. Stock represents a claim on the company’s assets and earnings. … The idea that a corporation is a “person” means that the corporation owns its own assets.

A stock (also known as “shares” or “equity) is a type of security that signifies proportionate ownership in the issuing corporation. This entitles the stockholder to that proportion of the corporation’s assets and earnings.

Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and are the foundation of nearly every portfolio. These transactions have to conform to government regulations which are meant to protect investors from fraudulent practices. Historically, they have outperformed most other investments over the long run. These investments can be purchased from most online stock brokers.

KEY TAKEAWAYS
A stock is a form of security that indicates the holder has proportionate ownership in the issuing corporation.
Corporations issue (sell) stock to raise funds to operate their businesses. There are two main types of stock: common and preferred.
Stocks are bought and sold predominantly on stock exchanges, though there can be private sales as well, and they are the foundation of nearly every portfolio.
Historically, they have outperformed most other investments over the long run.
Understanding Stocks
Corporations issue (sell) stock to raise funds to operate their businesses. The holder of stock (a shareholder) has now bought a piece of the corporation and has a claim to a part of its assets and earnings. In other words, a shareholder is now an owner of the issuing company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company’s assets and earnings.