What are stocks?

I just realized that I posted here about Stock Market Investing, but I didn't go into much detail about this question-- what are stocks, anyway?

When a company wants to raise money, they can do it in a couple of ways. They can issue bonds, which we will talk about another time, or they can sell stock in their company, sometimes called 'equity' or 'shares.'

When the company does this, it means that anyone who buys one of those shares becomes a partial owner in the company. The first time this happens, it's called an Initial Public Offering, or an IPO.

Those shares are then traded in the stock market (and we will talk about what that is, another time too), and the stock price changes in value based on how the company is doing, how the market or economy as a whole are doing, and on what the public perception of the stock is.

There are over 3500 stocks in the United States, and many more across the globe. Stock prices vary from moment to moment, and depending on the company, can be quite volatile.

The MGB Investing Starter Kit won't be investing in one stock, one company, but on a collection of 500 companies. The fact that it will invest in so many different companies means that as an investment, it can be more stable over time, than some of the ups and downs you see with individual stocks.

Might you have a company whose stock price you watch? Tesla, Walgreens, or Apple? Let me know in the comments! and as always, thanks for reading this.

Quick Links:

What is Money? is HERE

What is Investing? is HERE

What is The Investing Starter Kit? is HERE

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