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What is a stock?

A stock is a type of security that says you own part of the corporation that issued it. Stocks are also known as shares or equities.
A person that owns a stock is a shareholder or stockholder.
A stockholder is entitled to a proportion of the corporation's assets and earnings.
Stocks are bought and sold predominantly on stock exchanges.

What is a stock exchange?

A stock exchange is where stocks are bought and sold. The United States has two major stock exchanges: The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ) Exchange.

Why should I buy stocks?

People buy stocks (shares) for two major reasons.
First, they expect the share price to go up. This is known as capital appreciation. Meaning, if they buy Apple shares at $209, and in 6 months, if the share price goes up to $250, they have made $41.
Second, people buy shares because they expect to get some income from the company, on a periodic basis. This is known as a dividend. Companies pay dividends from the profit they make within a period, or when they sell an asset.

What is a shareholders meeting?

A shareholders meeting may be an Annual General Meeting (AGM) or Extra-Ordinary General Meeting (EGM) where the company's performance over a period of time is reviewed.
An Annual General Meeting (AGM) is held once a year, usually, after a company has released its full-year results. If there key issues to discuss before then, an Extra-Ordinary General Meeting (EGM) is held.

What is a dividend?

A dividend is a cash payment to shareholders of a company, from its profit. Dividends may be paid at the end of a company's financial year, or halfway through the year.
A dividend payment made halfway through is known as an interim dividend.
A dividend payment made at the end of a financial year is called a final dividend.
A company can also decide to pay dividends, from one time profits such as profit made from the sale of an asset. This is known as a special dividend.

What are earnings?

The earnings of a business are the same as its net income or its profit. The earnings of a business are usually calculated as all revenues (sales) minus the cost of sales, operating expenses, and taxes, over a given period of time (usually a quarter or a year).

What is Market Cap?

The market cap, short for market capitalization, is the value of a company that is traded on the stock market. Market caps are calculated by multiplying the total number of shares by the present share price.

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