A stock is a type of security that represents ownership in a corporation. When you buy a stock, you are buying a piece of the company. You become a shareholder and have a claim on the company's assets and earnings.
You can decide to keep that claim or share ownership for any time period you'd like or sell it to someone else.
Your goal as a shareholder is to make money by seeing the value of your shares increase over time which generally happens when the business is performing well.
There are two ways to make money from owning stocks: dividends and capital gains. Dividends are payments that companies make to shareholders out of their profits. Capital gains occur when you sell your shares for more than you paid for them.
Now that you know a little bit about how stocks work, let's discuss how to value them.