Discover News and Prices Raise finance Trade Personal investing Resources Home > Personal investing > What are stocks and shares? Back What are stocks and shares? Posted: 25 May 2020 Share Contributor: London Stock Exchange | When you trade on our markets you invest in specific securities, such as shares. London Stock Exchange offers trading shares in companies, from the very biggest to those showing potential for rapid growth. Shares, which are also known as equities, are the basic unit of investment in these companies. Businesses issue shares to raise money, sometimes to finance expansion. If you decide to invest in them you will become a part-owner in the company and benefit from its success, but you also face some risk if it doesn’t perform well. There are two ways you could benefit if you decide to invest in shares. You might receive a regular income from the company in the form of a dividend, and you might enjoy a capital gain if the company does well and the value of your investment rises. Suppose you buy 100 shares in a company for £10 each ­– costing you £1,000 plus your broker’s fee. Many listed companies pay a dividend every quarter or six months. If the management decided to pay you a 7% dividend you would receive £70. The value of your shares might also rise to £12 each, so you could then sell them for £1,200, making a capital gain of £200. More articles 350.48 What are stocks and shares? Contributor: London Stock Exchange | When you trade on our markets you invest in specific securities, such as shares. London Stock Exchange offers trading shares in companies, from the very biggest to those showing potential for rapid growth. Shares, which are also known as equities, are the basic unit of investment i Learn more What should you consider before investing? Contributor: London Stock Exchange | Financial markets provide a marketplace for you to buy and sell assets like shares, bonds, currencies, derivatives and even physical products like commodities. London Stock Exchange offers a marketplace for those securities. Learn more Why investing matters? Contributor: London Stock Exchange | Everyone has financial goals. You may want to fund your retirement, help your children with their education or with important life events, such as buying a home. Learn more Disclaimer This publication does not constitute an offer to buy or sell, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction who is not qualified to do so, or to any person to whom it is unlawful to make such an offer or solicitation. Information in this publication is provided ‘as is’ and London Stock Exchange plc (the “Exchange”) does not make any representations and disclaims to the extent permitted by law all express, implied and statutory warranties of any kind in relation to this publication, including warranties as to accuracy, timeliness, completeness, performance or fitness for a particular purpose. The Exchange does not undertake any liability for the results of any action taken or omitted on the basis of the information in this communication. Information is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular, information in this publication does not constitute legal, tax, regulatory, professional, financial or investment advice. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances. DisclaimerPrivacy and cookie statementConflict of interest policy & UK bribery actAccessibilitySitemapContactSection 172 (1) statementWhistleblowing View our other sites Select © 2021 London Stock Exchange. All rights reserved. Cookie Control Cookie Control Link Icon