When you buy a stock, you are quite literally buying a piece of the company. You are an owner and the value of your ownership rises and falls with the fortunes of the company. When the company is doing well, your investment in the company will rise. If things falter, you can expect the value of your stock to fall. We ll discuss that in more detail in a moment.
Stock prices are volatile.
They go up and down, sometimes drastically, often inexplicably. But, despite this volatility, stocks offer the best protection against inflation. And stocks are historically the best performing investment over the long term. If you know how and when to buy them. There are basically two types of stock, common and preferred.