Stocks, also known as equities or shares, represent ownership in a company. When an investor buys a stock, they essentially purchase a small part of that company, making them a shareholder. Stocks are traded on recognized exchanges like the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India. Their prices fluctuate daily based on factors such as company performance, investor sentiment, market trends, and economic conditions.

Investing in stocks allows individuals to participate in a company’s growth. When the company performs well, its stock price may rise, offering investors capital appreciation. Additionally, some companies distribute a portion of their profits to shareholders as dividends. However, stock prices can also fall, which makes them a high-risk, high-reward investment option compared to traditional instruments like fixed deposits or bonds.

There are two primary types of stocks: common stocks and preferred stocks. Common stockholders have voting rights and potential for higher returns, while preferred stockholders receive fixed dividends and priority during liquidation. Investors can analyze stocks using fundamental analysis—which evaluates a company’s financials, management, and growth potential—or technical analysis, which studies market trends and price movements.

Before investing, it is important to understand one’s risk tolerance, financial goals, and investment horizon. Diversifying across sectors and staying informed about market developments can help reduce risk. New investors should focus on long-term wealth creation rather than short-term market speculation.

Disclaimer: This article is for educational purposes only and should not be considered investment advice. Investors should conduct their own research or consult a SEBI-registered financial advisor before making investment decisions.