An investor who buys stock in a company becomes a part owner of that business. If the company does well, the stock owner will receive periodic dividends, or a small part of the company's profits. As the company grows, its stocks become more and more valuable. While money in the bank may grow only four percent or so in a year, stocks often grow by two or three times that amount. Some stocks have doubled their values in just a few years.
Many people like to invest in ''blue chip'' stocks.
These are stocks that have a record of a steady increase, and don't go up and down a lot. Another popular investment is ''mutual funds'' which are created by an investment company. The investment company will buy a variety of stock, some in fast-growing but perhaps more risky stock, and some in the slower but steady stocks. You, then, buy a share in the total fund, rather than in one stock. They must be registered with a stock exchange.