This is the second article in a series on investment basics. If you are new to investing, it is recommended that the articles be read in order. Prior articles introduce terminology that is used in later articles. Stock represents ownership of a company.
Stock is bought and sold as shares.
Each share is one unit of ownership. As a part owner of the company, you receive information about the company financial performance and you have voting rights in determining who runs the company. As a result, an objective of management is to make money for the stockholders. Stockholders typically vote on company officers and on certain significant changes such as mergers between companies. When a company issues stock, it is said to be incorporated and is then a corporation.